Denon 2803 vs 3803

Here is link to Denon's 2004 AVR features chart:

http://www.usa.denon.com/catalog/pdfs/AVR%20New%20Model%20Chart%20092203.pdf

I got the 3803 because it has component video upconversion. That means I only need one set of video cables to go to my big screen hdtv. It also means we never have to switch video inputs on the tv. Prices on the 3803 have been coming down because the 3804 is out. I use the set up mostly for movies. My guess is the 2803 would meet your needs fine.

I think the 3803 has better Processors than the 2803 if I'm not mistaken. I'm not sure. I used to own the 2803(which I got as credit from a trade in), and it was just Ok overall for my tastes. I personally think you'd do much better adding another amp if you have the choice, yes! Case in point...
...I once did a demo between the Yamaha's old flag, the DSPA3090 and the Denon's AVR5600, the top end many years back. I ran these receivers into smaller B&W Dm602/1's, as well as Large Mirage M5's, both running as "small" and "full range" for many tests. I did movies and music(various, rock, regae, classical, etc). After getting just "ok" results using these "highly rated Class A receivers" at the time(Stereophile's ratings for HT), I decided to use them both from their "pre-out's", driving into a dedicated 3 channel Denon POA8300 THX amp. The separates amp setup's simply blew the receivers amp sections in the dirt!...not even close by a WIDE MARGINE! Soundstage, dyamics, power, detail, refinement, everything was better! I really didn't know how compromised amp's were in receivers(even flagship models) till that time.
I've sold big receivers in many jobs since then. And I can tell you things haven't changed so much since then in that respect byenlarge!(The Denon AVR5803 is about as good as I've heard a receiver on it's own)
I recommend the smaller receiver and maybe pick up an Outlaw 100x7 amp! This dirt cheep amp is a no brainer. It sounds really good to for what it is. Otherwise, I recommend the OUtlaw 950 pre/pro instead of what you're doing. For $1600 you get superb separates. And the overall sound from a denon as a pre/pro won't do any better. You also have "dirrect analog input's" for purity of analog pass-through, and 24/192 excellent dac's! I recommend this approach over what your considering as first choice, IMO.
Better dynamics can be had with even better pre/pro's.
Still if you need to budget, you'll do "ok" with the Denon.
Mind you, you'll probably most certainly get better sound going "digital dirrect", processing in the Denon, rather than using the analog connections(of course for DVD connection).
In short, These receivers on their own aren't anything too special compared to better speparates pieces. And for used, you can find some gems if you look. Otherwise, I'd do Outlaw. That combo is unbeatable for the buck new! Good luck
Good luck

Okii, I would go with the 3803 and then later on down the raod, add a 5 or 7 channel amp. Years ago I would have agreed with exertfluffer as separates being the way to go. A lot has changed since then and to be honest with you I don't think that the Outlaw combo can hold a candle to todays receiver monsters, ie: Yamaha RXZ9, Denon 5803, and Pioneer Elite 59txi. Of course we're talking more than twice the money for one of these receivers, also. Dollar for dollar there are no separates that can out-perform the Denon 3803.

Although separates are superior, I would agree with Mborner that current receivers have improved tremendously over the years. One fine example is the Denon AVR-5803 and although it may not be comparable to the best separates out there but it comes quite close at a fraction of the cost.