Experts: Why is preamp important?

It seems like you're asking a couple questions at once. The issue of why a preamp is important is a pretty broad question, and the answer is dependent on very many variables.

The more tactical question of how do you go from your Pioneer HT receiver to the "next level" and spend your dollars most wisely also depends on a few variables, but is easier to answer. IMO, no question, buying a good amp and using the pre-outs on your Pioneer will be a substantial upgrade. You don't give a budget, either immediate or longer term, but there are any number of two-channel amps that are very affordable used, that would be a substantial upgrade, and if you can spend more, the benefit would just increase. Then, at a later date, buying a higher-end pre/pro to replace the pre/pro functions of the Pioneer would again be a substantial improvement.

Charting the path, especially in a dual-use system, requires really understanding your parameters and your priorities, but, in general, replacing the functions of a HT receiver with dedicated, higher-end separates is going to be a substantial upgrade.

Kthomas, you are right, I am asking several questions. I am generally interested in what exactly a preamp does, then I'm more specifically interested in how important it is in my upgrade path. I now have speakers in my HT system that will do justice to my critical music listening needs, so I'm trying to figure out whether I should get an integrated amp, just an amp, or possibly separates. I have some space constraints that I may have to work around as well. My amp budget is probably $2k-2.5k (maybe 3k if value is there) and I will buy used to increase value proposition. I have listened to some integrateds that I love (Mac MA6500 and the Cayin H80a), but they are quite large and neither have HT bypass. I know there are workarounds to this, but it gets more complicated. Then I started to think that maybe spending the same money on just the amplification might render bigger improvement and also simplify the process (just going pre-out to the amp and that's it). That's why I asked the preamp question.

I may also consider upgrading source, currently Pioneer dv47a universal player. I will also be upgrading my Sonos unit, probably with a Cullen mod and mayber also a standalone dac, although the dac in the Pioneer rcvr is excellent, and compares favorably to what I'm getting out of a Sonos/BelCanto DAC2 setup in my upstairs system (older B&W matrix 803s2 pwrd by Acurus DIA100 passive integrated). So I'm tackling numerous issues and trying to manage budget as well. Hopefully this gives you a little more insight into what I'm trying to accomplish.

preamp functions:

1) provide volume control
2) input switching
3) provide any needed gain or attenuation
4) and least understood- control the interconnect cable between amp and preamp to minimize the effect of the cable. Most sources cannot do this BTW.

Atmasphere, Would you please elaborate on point 4. I would like to understand that function better. In some applications I have found "source direct to amplifier" less than satisfying.

"4) and least understood- control the interconnect cable between amp and preamp to minimize the effect of the cable. Most sources cannot do this BTW."

Thank you.

Others have covered what a preamp does so let's turn to what you might do with your system.

In higher end systems the preamp becomes a more dominant component in determining the ultimate sound quality. Recievers and surround processors are not very good sounding when compared with good analog two channel preamps. Besides being designed and optimized for "theater" rather than music, they are loaded with RF producing digital components that negatively affect the analog signals. Even the best digital surround preamps from companies like Meridian do not equal the sound of many dedicated two channel analog preamps.

Your best bet would be to get a high quality analog preamp and run the pre-outs from your receiver to a processor input (or any unused input- it's not that complicated at all).

Next, purchase either a very good multichannel amp that is capable of being an impressive two channel amp for your mains, or get a separate dedicated two channel amp for your mains and use the receiver's built-in amplification to drive the center and rear speakers.

All of this assumes that you really value listening to music in two channel and want to make a major upgrade to that part of your system.