You are there-they are here

Excellent question. It was discussed at length a few years ago in this thread. My own comments are included there, which are consistent with the response that Kal (Kr4) provided above.

Regards,
-- Al

Your system is there to provide suspension of belief and fool the senses.

I agree with Al and Kal, I want my system to be able to portray both depending upon the material I am enjoying at any given time. Yes, one system can do both, if properly set-up and your room is capable of allowing that suspension of belief to occur. How to do that is the subject of many other threads, search them out.

Demar,
I've found that in my system the type of presentation depends on the recording itself.
Regards,

Definitely check out the thread Al referenced. I would definitely emphasize the word illusion in your post, though, especially with respect to they are here. Simply not going to happen if you listen to large ensemble music. And I would agree with Charles that this is also very recording dependent.

No matter what your preference is, oftentimes the recording will dictate the presentation, but of course, the overall power response of your speakers and the way they interact with your room will always have a strong influence. I personally prefer the "you are there" experience most of the time, as I feel I can get a better perspective of the total picture.