5.1 / 2 Channel

you can use your exisitng setup for 2ch (make sure you connect your perfectwave to the analog inputs on your marantz and use direct mode for music); however you'll probably see a benefit from adding a seperate 2ch power amp to power the fronts. generally, the achilles heel of avrs is their internal amp section. i'd try using your setup first and see if your happy with it.

Thanks for the reply and the tip. I will certainly do that. A friend of mine suggested that piping the DAC through AVR may compromise the musicality and suggested I try a dedicated amp with HT bypass.

How do I connect a separate 2 ch power amp to my AVR? I guess I will connect the amp to pre-out in the AVR, and connect the front L&R to the 2 ch amp. Does this sound right?

Will this arrangement cause any problems if I want switch between movies (using the AVR) and music? How do I match the volume?

Thanks again.
wf.

writeface:
on the rear of your marantz you'll see preouts for all seven channels--you connect the power amp (using red/white analog cables) to the preouts marked front right and front left, respectively. your manual will show you the exact location. you will then connect the front right and left speakers cables to the power amp, not to the avr (the other speakers, which are powered by the avr remain connected to the avr). after connection, you'll redo your setup, level balance etc. to adjust speaker volume and so forth.
there will be no problems switching between music, movies, tuner or whatever--the only difference is that your front speakers aren now powered by a different (presumably better) amp than the rest of your speakers, which will only be discernible in two channel mode.
again, i'd do some comparison to the sound with or without an external amp to see if it makes a significant difference in your case. i added an external (parasound) 2ch amp to a denon 4800 in my bedroom system and found it made a huge difference, but having not heard your marantz avr i honestly can't opine as to your setup. good luck and let us know how it fares.,

Upgrade your front speakers.