Teslaroadsters:
I guess the first responses I have to your question are a few more questions. I hope they don't sound pedantic. To start with, what do you find dissatisfying about your current system? and, what are your ultimate goals?
It is important to ask these sorts of things in any system upgrade. Most fundamentally the question is what is it about audio/ home theater that makes it important to you? There are many different motivations. I don't presume to say any of them are wrong - they are just different.
Some people are enticed by the idea working to build something up - to make it of higher and higher quality. Others, when they really think about it, actually are quite happy with what they have, but somehow have settled on upgrading because that is what they think they are supposed to do. Finally, some become enthralled with the emotional connection (or involvement) that they feel to music when played through a good system, and they seek better and better equipment to make this connection fuller and stronger (that is up until a point that they decide the increased expenditures really are no longer increasing their joy in the music).
If you are someone who truly is dissatisfied with his system, but see only moderate future expenditures after this next upgrade, then I stick with the suggestion you go with an Arcam AVR Receiver that allows HDMI switching. You need to choose whether you listen to enough music or watch enough regular DVDs (as opposed to BlueRay) to optimize this playback (e.g. with a DV 78, which is also a very good CD player) rather than relying on your PS3. Later, upgrade your speakers as money allows and you see fit, then hold firm. You then will have built a solid home theater system on a solid foundation, and it will reward you well. But mind you, what you have may already be rewarding you well. Just because an upgraded system would be better doesnt mean it would be more important * to you *.
If you are someone who envisions building his system up to be better and better over time - either out of a passion for more emotional connection with the music/movie experience, out of a drive to build a system up to be better for its own sake, or some combination of the two, then you are better off with separates. I can't speak to what processor will be best in this price range I simply dont have experience with it. (But be sure it has HDMI switching or it will be useless to you with BlueRay. ) I can tell you that you will be extremely hard pressed to find a better 5 channel amp for the money than the Linn 5125. But as always you must be aware that my opinion is based on my taste, and it is always possible that over time you will disagree. Still, for now, I can't see a better place to start with amplification.
