on a related note, what should i look for in a reciever
Well, back in April Chaz got me looking at 7.1 channels and the Dolby True HD and DTS-HD Master Audio codecs which is why I bought the new receiver (I wouldn't have, except that I got a such a killer deal). They are impressive although we both agreed that there really isn't much for true 7.1 available right now, but there will be.
What I usually do is tell people to take stock of all their current physical inputs and outputs (TOSLINK, HDMI, Digital Coax) and their non-physical inputs and outputs (Dolby Digital, Dolby True HD, etc.). You can get most of this information from the manuals or online. I know this sounds dorky as all hell, but you will find great benefit in mapping all of this out. You will find that even though your stereo has digital Coax and TOSLINK, not all of the non-physical outs will work over both so map it in such a way that you know you need two TOSLINK inputs and 2 HDMI inputs for maximum non-physical output.
Then look at where you think you'll be in 5 years. Are you adding Blu-Ray, new gaming console, adding a bigger TV, etc....
So then pick a system that meets all of your current needs but gives you a little room to grow. Lastly, look within your budget to buy the most wattage possible along with a full set of speakers (if you don't have them already). Lots of times I'll see people buy a high watt surround system, but use three speakers - what's the point? I'd rather buy lower wattage and have a full compliment of good speakers. Wattage is really based on the room you need to fill the sound so you'll have to guage as I've never seen your place. Look at what you've got now, how often you crank it up, and how far you sit from your speakers and see if that's satisfactory. Use that as a guage, but don't overpay for wattage. Most people never use half of what their systems are capable of...
Unless you never plan on buying Blu-ray, I'd say you have to at least take a look at a system that supports Dolby True HD and DTS-HD Master Audio. I tend to buy a new receiver every 7 years or so, and even though I don't plan on buying a blu-ray player, I do think at some point in the next 7 years I will have Dolby True HD in a digital file and something to play them with, so I made the leap. I know DirecTV is going down this route at some point, which was enough for me.
I'm always here to help. If you think it's beneficial for the group, we can do it here or you've got my email address.
This is the system that I bought. It's not the most powerful system (mid-level, I'd say), but we still live in a one bedroom apt in a city with neighbors really close by. Even if we upgrade to a condo in the future, we're a long time away from the suburbs so I don't need that much.