@rjb1101 - your dealer's statement that a "home theater bypass" in a preamp will completely bypass the 2x preamp stages in a particular preamp is not entirely correct. A lot of preamps will just act as a "unity gain stage". This means that the signal will still go through the one or two analog stages (which are usually configured to be unity gain anyways -- the definition of unity gain being that a signal exits the analog circuit at the same voltage level as input). In a lot of cases, the "home theater bypass" will just bypass the volume attenuation and balance controls (which are usually just volume potentiometers or resistor-ladder arrays).
It's not always clear what a preamp will actually do. For example, looking at any Krell preamp documentation, their documentation specifically states that the unit will act as a "unity gain stage" and the volume/balance controls are disabled for "ease of use" -- so that you can use the volume & speaker calibration from the HT receiver.
Sometimes a unit documentation will not specifically say what exacty it does (whether it is truly bypassing the analog circuits or just bypassing/disabling any volume/balance/tone adjustors).
In any event, I would not call this a degradation of sound quality. Running the sound through a very nice preamp analog stages can help shape the sound better. This may, at a minimum, give you better sonic quality when music plays during a movie (primarily output on left/right channels).
Also, you don't necessarily have to have a "home theater bypass", per say. If you don't, you will just have to set the preamp/integrated volume setting at exactly the same place you did when you calibrated the left/right channels on the HT Receiver.