What? Cant hear the voices

Audio compression will help minimize the problem, but is this a solution or a band aid?

If you can't hear voice then something is wrong with your speaker quality or you are not properly using the phantom function to send center channel info to your main speakers (as you have no dedicated center channel).

Built in speakers in most TV's are NOTORIOUSLY bad....they are usualy boomy in the bass and suffer from mid range compression (all in order to sell in the two minute demo sales floor test - loud sells - so engineers design a TV that requires you to significantly jack up the volume to hear the voice and that way they sell more TV's than a competitor with an accurate sounding TV that is all too clear at lower levels! BTW this same technique is also used to sell speakers.....jack up the bass and the treble and kill the mids....actually easy to do even a speaker with "flat response" may have these features built in...all they do is narrow the mid range dispersion and use a low cost design that compresses the mid range at higher volumes...in the shop demo you tend to turn up these speakers louder than you would a more balanced design)

I looked at the pictures of your system and room. I wonder about the effects of all that glass behind the speakers. Might a curtain reduce some of the problematic reflections that the window likely introduces?

Audphile1: Thanks for the suggestion. I looked up the reference and it seems to be an elegant solution for someone such as me who is not needing the ultimate in surround. Do you have one of the Yamaha units and do you like it?

Gammajo, no I don't have this unit. I remember seing a picture of it in Audio Advisor and thought that this would work well for you so I looked it up on their website. It's not really cheap, but looks to be just right for what you're trying to do. Plus it has several digital inputs so you can basically have your dvd player and your cable box hooked up to it. And no receiver required!
AA offers 30 days money back so if it does not work out for you, all lost is shipping cost.
I wish I can offer an opinion in regards to how this thing sounds, but I never listened to it.
I think it has to sound way better than your TV speakers though.
Best of luck.

yeah, I thought I responded to this post already, but apparantly not. This sounds like a speaker/seating placment problem, and acoustics issue! If you can't understand the dialoge on good speakers/gear, that's your problem(s). You're bass is probably booming, and off-balance with the rest of the system, and you may or maynot be treating acoustics and "reflection" issues well enough, that your image is getting "smeared", and dialoge is vague. All of the above likely.
Do you find yourself going "up and down" on the volume all the time to compensate for loud passages vs quite ones, with low volume dialoge? You should also consider the noise floor in your room, and sound issolation.
Yep those are your problems..