Which is better: separates or receiver?

I am not sure how these product compare sonically at this price level. I will reiterate though the flexibility of seperates. Its great to be able to add or swap one piece giving you a long time value.

I'd have to give the nod to seperates. Purely from an upgradability and sound quality standpoint. While there are a lot of "good" receivers on the market, I don't think you can achieve "really good" power, processing, flexibility and upgradability from just a receiver. Also, I tend to shy away from "multi-channel" amplifiers, such as using only one to power your entire system. What would happen if the amplifier goes on the fritz? You've now lost your entire system. I prefer to stay with seperate 2- or 3-channel amps, (4-channels, if they're going to be bridged), that way if one dies, at least you still can listen to stereo sound by simply doing a quick re-wire of your system, if necessary.

Tmartin's post is valid, but given that few components have component video switching, especially in a budget market, and the number of outboard video switchers (extron comes to mind) the video issue is an easy upgrade later, especially if you use a good universal remte (I use a pronto)that can tie it all together...

Just a thought, personally I'd go seperates, I started my HT with a receiver, then added seperate power amps and finally went to seperate AV pre/pro (Linn AV5103). Seperates are always easier to upgrade and I find maintain resale value far better than receivers.