Calgarian, it doesn't look like you're getting any replies so I'll offer some comments, and hopefully others more knowledgable of the tradeoffs in trying to do an effective surround sound set-up will weigh in.
In my opinion, you've identified the critical issue: getting really good two channel sound, then going for the extra channels once that's accomplished. I think your instincts are correct to focus first on a good two channel amp. Rotel's own 2-channel amp is likely to have better sound quality than their multi-channel amp: just getting the power supplies right takes chassis space and significant parts. This is something Rotel usually does well, but I can't imagine they haven't had to make some compromises on this in the multi-channel amp. Many excellent alternatives exist for you to consider, as you've mentioned.
As to the preprocessor, there certainly are excellent sounding 2-channel linestages that will be superior, but it won't be *just* because they are 2-channel. Some linestages may not sound as good as your current preprocessor, so I recommend you apply some critical thinking and *listening* on this element of your system in a next phase.
There are several members on Audiogon who've assembled superb 2-channel systems to which they've added the surround sound processing capabilities for those ocassions when that option's desirable. Albertporter has posted a couple of times about how he's accomplished this in the world class 2-channel system he uses.
Good luck!
In my opinion, you've identified the critical issue: getting really good two channel sound, then going for the extra channels once that's accomplished. I think your instincts are correct to focus first on a good two channel amp. Rotel's own 2-channel amp is likely to have better sound quality than their multi-channel amp: just getting the power supplies right takes chassis space and significant parts. This is something Rotel usually does well, but I can't imagine they haven't had to make some compromises on this in the multi-channel amp. Many excellent alternatives exist for you to consider, as you've mentioned.
As to the preprocessor, there certainly are excellent sounding 2-channel linestages that will be superior, but it won't be *just* because they are 2-channel. Some linestages may not sound as good as your current preprocessor, so I recommend you apply some critical thinking and *listening* on this element of your system in a next phase.
There are several members on Audiogon who've assembled superb 2-channel systems to which they've added the surround sound processing capabilities for those ocassions when that option's desirable. Albertporter has posted a couple of times about how he's accomplished this in the world class 2-channel system he uses.
Good luck!