Onkyo HTS 3500 vs Denon DHT 1312 XP

I'm planning to buy a HTiB soon.

Now I have finalised 2 models : Onkyo HTS 3400/3500 and Denon DHT 1312xp. My max budget is 500 $


Now Hifi purists would like to advice to build a separate HT system slowly, by adding components one by one. It does make sense.
But, in that case the cumulative final cost will be above my budget. I don't wanna spend so much for HT setup.

There are some negative aspects of Onkyo which are bothering me. Otherwise I would have chosen Onkyo without any hesitation. Google search reveals that Onkyo model is more sold than Denon one.
1. The passive sub of Onkyo, HTS 3400 does not have a stand-alone receiver. / HTS 3500 does not have Audyssey's Room Correction

This is my biggest concern as after 2-3 years if the receiver develops some snag then I have to replace /repair the AVR. And if the sub dies then I will be left with no option but to change the COMPLETE system. I don't think passive subs are available for HT? If yes then please let me know. from any reputed brand -- Velodyne has one > Amazon.com: Velodyne SC12 12-inch Passive Subwoofer - SubContractor Series: Electronics

But the price is not justified for this Htib (499.98 $).

So what I want is a budget HTib system with an entry-level AVR which does not have a passive sub.

I have only one option Denon DHT 1312 XP

But very few people from this forum own this system . I want to know why ?

Is the sound quality inferior than Onkyo HTS 3400/ 3500?
Is it because it costlier than Onkyo HtiB ?

I have demoed Onkyo HTS 3500 and to be very frank its bang for buck but not overwhelming.

I have a old Sony DAV-SB100 > (each channel 50 watts sub 80 watts)

And you will be surprised that Onkyo fared marginally better than my 6 year old Sony HtiB. The sound of Onkyo is a bit flat, the high frequency does not shine and action scenes with complex effects do show some limitation of the Onkyo speaker system.

So given these reasons and my above mentioned budget concern , will it be a correct decision to choose Denon DHT 1312 ....?

review of Denon DHT 1312 > http://www.expertreviews.co.uk/home-entertainment/1286578/denon-avr-1312/2

Any help guys. Waiting for your advice...

Thanks afrogt,
I was also thinking about this combination. But I think Denon AVR-1613 will be out of my budget (with speakers). There's a new model called AVR-1513 http://www.profx.com/denon_av_receiver1513.asp (about 468 $) without Audyssey.

I don't know if def tech will be available here but how does Wharfedale Moviestar MS-100 HCP pair up with Denon? Do they compliment each other?