Cheap receiver + amp vs Expensive receiver

obviously, your question is not suceptible to pithy absolutes and its answer is dependent on the details. a top flight avr like b&k or sunfire will undoubtedly sound better than a garden variety mass-market avr augmented with a garden variety power amp. however, if you're comparing products within the same price range, i believe you're better served with separates since, among other reasons, the inboard amps in most avrs are generally wussy and underpowered and cost-cutting and engineering compromises are inevitable in the process of sticking everything in one box.

To keep it simple: A $400 receiver with a sunfire amp will not be anywhere nearly as good as a sunfire pre/pro with the same amp. Better DAC's, better video processing, better crossover systems, better binding posts, bigger power supply, nicer remote and so on...
Do you have anything right now? If yes, what? If no, ask where to begin and on what budget.

Think about this: whenever you've purchased something/anything, how many times have you said to yourself "I wish I had spent a little more for better quality"?
Then think about how many times you've said "I wish I had bought the cheaper lower quality model instead"?

The bitterness of a poor quality purchase remains long after the satisfaction of low price has been forgotten.
You get what you pay for.

I'm with Bob_B. you usually do get what you pay for.

I'm hard pressed to believe one can make up for some lack in the processed or preamped signal by adding better amplification downstream.

My preffs in HT are different than my preffs in 2 ch. as well. For HT I look towards the upper half of the line up. usually settling for a step or two below the top O line receiver/processor. Same with HT amps more often than not. Mostly due to the price/cost of HT than anything else. Multiple speakers, sub (s) cables, amps, etc.

Given that, once I get used to it all, I tend to look to upgrading things, so some flexibility must be attained early on in the reciever or processor, or that road is a cul de sac

AS much as I'll want to continue to upgrade my HT deal, it carries far less priority for me. So very good there is good enough for me. Very good IMO starts up front. Regardless if it's HT or 2ch.

Think we need more info....regarding your needs and what is "cheap"

If you do not need 7.1/hdmi/extensive bass mgt etc....an older 5.1 AVR from BK/Arcam/etc (around 500) along with a nice older amp (forte, CJ etc @ 600)...probably will sound pretty good when compared to a new Denon or Onkyo AVR at around +1,000.

But you will miss out on the latest HT features and do not have to spend $$$ on the rca cable.