I would definitely not assume that. I recommended a 2 channel preamp just for this reason.
" I can certainly spend more, but not sure what I need. What I ultimately want is a processor with current audio decoders with good quality for home theater. Why wouldn't Denon be good for this ? How is marantz better?"
For movies, either one is fine. I would pick the Marantz but only if it didn't lower the amount I could spend on a 2 channel preamp.
" also considering krell krc 3 preamp, is there a good way to integrate this into home theater ? Would this pre amp be better for 2 channel than HTS7.1 and denon? Any thoughts on this preamp? "
I had a krc3. Yes, I would take it over the HTS, but preamps have come a long way. I'm pretty sure it doesn't have a HT passthrough.
Here's an article that explains this issue far better than I can.
http://vandersteen.com/media/files/APJ%20Files/APJ_4r.pdf