Best way to go HT with focus on 2 channel

If you're considering the Avatar you shouldn't have any trouble piecing together a great HT/2ch system. My 2ch system includes a Denon 3910 player, Sim Audio I5 integrated, and Von Schweikert VR4jr speakers. When I'm in HT mode, the processing is done by an A/V receiver which passes the front two channels to the Sim Audio (bypassing the pre section) and to the VR4Jr's. Von Scweikert sub, center and rear speakers round out the 5.1 system. I have selected components that give me great sound no matter what 'mode' I'm listening in.

If you're looking for tube 2ch sound then the Avatar would be perfect for a HT/2ch setup. Get rid of the pre and amp and purchase a good quality HT processor/amp or receiver, center, surrounds, and sub and enjoy.

Some Excellent advice given here.
Your preamp does not absolutely need "pass through". You do not need to get rid of it. Send the signal from the source for video to the video/aux input on the main two channel amp. Send the surround signals to the surround preamp. Calibrate/Match them volume-wise for HT use (Just be extremely careful when switching between movie mode and music mode that the volume is not too high). You'll need a multichannel amp if you don't have one yet. If you acquire a 5 channel amp, you can play around with vertically biamping your main speakers (two amps per speaker L/R)- often a nice improvement.
If you're not a die hard video fan, then put about 85% into two channel and about 15% into HT. Learn not to be hyper critical of the sound when watching movies...
Magnepan makes a very affordable surround/center speaker system. $700 can get you a pair of surrounds and center channel. Nice quality for the price. I believe there was a good review of them in Stereophile about a year ago. Also, check on audioreview.com for others' experiences on speakers.

One of the first big decisions you will have to make is -- do you want to go with a receiver or do you want separates.

I have a Sunfire receiver with Von Schweikerts all around in a HT system. I have tentatively made the decision to go with an integrated amp and use a bypass type set-up just like longhornav. I thought about the sim audio but I thought it was shy on power for the VR-4JRS. I am about to do some auditioning here in a couple of weeks.

I've had the same experience as S23chang. Moving the stereo speakers or even placing a video screen between them to accommodate Home Theater lets the stereo image fall apart. You seem to have some very nice two channel gear. Have you ever had your two channel setup, room, speaker placement, etc. evaluated? Once dialed in even minor changes will dramatically effect the stereo presentation.

I gave up and went an inexpensive HT setup in another room. The 5.1 audio (not HT) is another animal.