I get a lot of questions from readers, and by far, this is the one that seems to be on everyone's mind: "I have an old receiver, and I was considering upgrading to a newer model with HDMI switching and Dolby TrueHD and DTS Master Audio processing. Would I notice a dramatic difference in sound quality from what I have now?"
It's a hard question to answer for a lot of reasons, starting with the fact that one man's "dramatic" is another man's "subtle" difference. I think the best new receivers, like the, really do sound great.
But in terms of sound-quality differences, I can assure you that investing $600 on a pair of better front left/right or center speakers, or a more potent subwoofer, would result in a more significant sonic upgrade than a new receiver would at the same price. Think about it: moving up from a $300 to a $600 speaker (per pair) will make a far bigger difference than what you'd hear comparing one receiver to another. Sure, if you already have a superb $2,000 or more expensive 5.1, 6.1, or 7.1 channel speaker/subwoofer system, spring for a new receiver.
Before we go any further, my comments are based purely on potential sonic gains. If you need HDMI switching,, easy iPod/iPhone connectivity, Ethernet ports, or second zone functionality get a new receiver. But you don't need a new receiver to hear Dolby TrueHD or DTS Master Audio sound, if your Blu-ray player has them and multichannel analog outputs ( does) and your current receiver has multichannel analog inputs, you're set. You won't need to buy a new receiver to get the full benefits of Dolby TrueHD or DTS Master Audio sound.
As to which speaker to get, I'd recommend sticking with the brand you already have. Don't mix and match one brand's center-channel speaker with another brand's front-left and front-right speakers; that rarely works out. Just move up in the brand's line and select higher-end speakers from the same manufacturer. So if you have Definitive Technology's center and surround speakers, buy Definitive's front speakers.
If you already have decent left and right speakers, go for a better sub. There's less of a need to stay true to the speaker manufacturer's offerings, but it's not a bad place to start. If you have an 8-inch sub, consider moving up to a 10- or 12-inch sub. Then again, if you have small speakers, with 4-inch or smaller woofers, don't buy a bigger sub, buy bigger speakers. And if you already have a great set of front-left/right speakers and your subwoofer's up to snuff, upgrade your center-channel speaker.
But don't kid yourself that a new receiver will sound better than upgraded speakers or a subwoofer; it will not.