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Given your stated needs you are almost resigned to an AV preamp/processor or home theater receiver. For the best sound quality look to the high end pieces from Denon, Onkyo, NAD, Adcom, Parasound, etc.
I agree, certainly think about a sound processor you can may be start of with 2 channel amp then add the processor at a later date. I would add Yamaha to the above list also
Thanks, but I guess I didn't really put my question across properly. I still don't know where to start or in which direction to go.
First of all, what is a sound processor and is it any different from an AV/Receiver?
Secondly, no one has mentioned speakers, so obviously what has been mentioned thus far is not the minimum I need in order to get started. An AV/Receiver would be worthless without speakers.
What I need to know is what the minimum requirements for starting the system are and what the upgrade path will be for the future. For example, I don't know basic things such as whether a speaker without a power amp is worthless or whether a preamp is a necessity. Useful advice would be something like: "you must have x, y, and z in order to start enjoying your system today. Make sure that component y has features 1, 2, and 3, so that you can add components a, b, and c in the future to round out your system."
I would build a 2 channel system using separate components first.
I believe this is the best way if two channel music is your primary source as it is for me. In essence what I did was build a decent (to me) two channel system and then add surround/MC capability. When I play stereo music those sources go through only my stereo preamp, front channel power amps and speakers. All surround sources are connected to my processor. It drives the surround amplifiers and speakers and the front channels when my preamp is in bypass mode. All MC/HT sources are listened to this way.