I have a H/K reciever with 7.1 preouts. I don't place the highest importance on home theater, but I'm quite happy with my system for movies and TV. Check out http://www.harmanaudio.com for great deals on their gear. Denon recievers are also a good choice from my limited experience, but they're costly.
Can you give us a budget?
I think a reciever gives you a lot more flexibility than can be found except in much more expensive gear. My AVR235 decodes all the standard def DVD formats, plus gives me all the switching I need; alas, I have no digital video sources yet. A Yamaha VX-2600 has HDMI switching and video upconversion, so if you can swing $1k that's another box I'd suggest checking out. As suggested earlier, Crutchfield has a decent search engine and pictures so that's a good place to check things out before you head to stores to see products in the flesh.
General discussion for all questions based in the home audio/video world.
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