what should I upgrade next?

you are probably correct about the DVD player - maybe I should upgrade it next (it's a 5 years old Sony and it costed around $250 when I got it - so I don't think it matches the rest of the equipment in terms of quality).

Talking about DVD players - I believe if I just buy a good DVD player, I will not need an additional CD player, correct? I guess what I am asking is, is it worth to buy a DVD player and additional CD player? Will a good CD player be much better in reproducing music, than a good DVD player?
I guess I have to many questions...

Plamenz:

If I understand your comments correctly, I can come to 3 conclusions:

1. you seem to be satisfied with the Linn Index speakers, as they are still being used as front speakers.
2. you are definitely not happy with the NAD HT receiver.
3. your SONY DVD player is not contributing to your displeasure with the overall music sound, even though is about 5 years old. Since the DVD player is not your music source, it's a non-factor at this point (my guess is that you have a S360D or S560D ... which were excellent with movies, but terrible with CD's.)

So, what to do? Two choices really:

1. Exchange the NAD HT receiver for another HT receiver ... assuming that your dealer will play ball with you and has other brands to choose from. From everything that I have read, the Arcam HT receivers (AVR100) do a very good job with music. Price tag is about $1200 (and I do not know your budget and accordingly, should not be spending your money). If the Arcam is not a brand that your dealer has, the Denon 3805 could be a possibility. If these are both too pricey, take a look at the Denon 2805 in the $800 to $900 range. Denon has really improved this model from its 2801 incarnation a few years ago ... the 2805 should be on-par with your NAD 302.

2. Go with a separate 2 channel amplifier for music and use the NAD for movies. You will be doing that whole PREAMP OUT switching thing ... but that may be OK for now.

Do not go chasing cables or other accessories at this point as possible solutions ... as you are unhappy with the NAD's basic sound. Cables and the such are usually "incremental, in addition to" type improvements that rarely offer complete transformation. Also, worry about the DVD player later ... get the amplification issue settled.

Regards, Rich

Rich

What you said make sense - I will wait first for the new receiver to see if it will be any better and then I will have to talk to the dealer to see what my options are. I went to the Arcam web site - they have one dealer in the whole US - I don't like that. I am also considering Rotel. Another option will be to buy separate components from Nad - I did not find a bad review about those. Yes it will be more expensive, but I can trade my T753 for a T163 pre-amp ($200-300 more) and then buy a used power amp.
Or maybe I should keep my T753 and just buy a used power amp - the problem is that I don't know if the hiss is coming from the pre amp or from the power amp.
It's not easy, let me tell you...

You know, this is interesting. I've been using Linn speakers (Ninkas, Trikan, and 5110s), and interconnects for several years. I'm using a Marantz receiver (now an SR8300) and cd player (now a DV8400).
It was very nice, but the Ninkas were lacking in dynamics and a good soundstage. I then got a bug to upgrade the cables. I went to Nordost Blue Heavens. Changed out the inputs, and went to bi-wire.
Okay, the first week the system sounded better, but not jaw dropping. Then things began to change. Soundstage increased, dynamics increased, and everything started to sound better. I'm very happy with my setup now, and I'm very impressed.
What exactly happened? I'm not sure, but I'm smiling.