Best AV Processor for 2 channel

I had the same idea in mind when I went shopping for my gear. I ended up with the Parasound C2. I actually met the owner of Parasound and talked with him a fair bit. His vision was building a great 2 channel preamp that was ALSO a great 7.1 prepro. I think he succeeded. The C2 sounds awesome and you can bypass the processors by using the analog 7.1 inputs of the C2. It also has a ton of other features, inputs, outputs and upgradable software. Check it out.

I had the same dilema and went with the Aragon Soundstage. Sounds great in stereo with the stereo direct mode which bypasses the the DACs and goes straight to the amplifier. This feature is availabe on all inputs.

Hope this helps.

I have both a Parasound Halo C2 and Proceed AVP2+6 and I can tell you that the Proceed kills the Halo pre-pro when it comes to the analog 2 channel and SACD. Redbook CD's also sound better when fed through the digital input but the difference is more subtle.
The Proceed does bass manegement through it's 6 channel analog input which the Halo C2 does not. To make sure this was not the difference I did set them up exactly the same with no bass manegement and set the levels using the Avia test disc. The Proceed AVP2 still produced such a stunning soundstage and air around the instruments that I was in heaven.
I do prefer the Halo C2 in home theater though which is not what I expected.
Since you can pick up a Proceed AVP2+6 for around $2,700 to $3,200 I am sure you would not be disapointed. Make sure it has the +6 option though if bass manegement for SACD/DVD-A is important to you as it sounds very transparent to me in use.

Naaaaaaa....I still like the idea of getting a more "budget" AV pre-pro, and looping it through your preamp's "dirrect" or "auxilary" or "Tape", etc inputs! Thus you can keep your killer 2 channel sound you worked so hard to get sounding right, and have more than satisfactory surround sound by adding either more amps, or using the amps (not so great however) in an AV receiver(as substitute for pre-pro).
Basically here, you'll save money, get the best of both worlds, with good amplification and processing on the video side, and you won't be spending a ton on an AV pre/pro and amp combo, that will likely shortchange you on your 2 channel, and not get so much better on the 16/44 DD/DTS material anyway!!!!
Heck, my old 2 channel system, with an Acurus Act 3 looped into the "dirrect pass through" on my 2 channel preamp, filled in with Acurus 125x5 amp for the rest of the speakers, was FAR AND AWAY BETTER ALL AROUND than most anyone I ever knew's system!
However you still, ofcourse, have options. If you go with a better (say EAD,AVP,Krell,whatever) AVpre-pro for your ALL-IN-ONE DUBTIES, you will, yes still get very good sound, probably either with digital or analog pass through connections, yes. I still don't think, in most cases(especially if 2 channel is strong for you) you're getting "the best of it", by ditching your 2 channel, and going "all in one", often compromised expensive AV pre-pro for your choice!
.....my two cents

AV Pre/Pros are not the most spectacular two channel performers...

of all the pre/pros I've heard over the years, the closest I've heard to really good two channel performance was from the Bel Canto PrePro through the analog bypass inputs. That's the best I've heard from "sanely" priced units (not that the price of a PrePro is considered sane by some individuals!! :) hehehe).

Even as I say this, I have to admit that I have heard better two channel preamps than the PrePro... so the idea of a two channel preamp with home theater pass through is a good idea, or something like the Pre2 or Pre6 from Bel Canto whereby it remembers volume settings for each input upon switching to it. Then you just set the volume level for that theater input and switch to it upon wanting to listen to surround sound...