If you buddy from work says he has surround sound but you don't see the receiver it is probably a Home theater in a box. The main unit of a HTIAB is the DVD player/receiver. Then it will have small little speakers that "surround" the listener along with a small powered woofer. They are inexpensive, but they lack the quality control of seperate components and the audio quality.
The receiver you have is a nice receiver, sounds like you paid suggested retail for the unit that would be supplied by the company that manufactured it.
A receiver is often mistakenly called the "amp" because it powers your speakers (speakers can't power themselves, they need amplification). A receiver is more than an amp, though it does have an amp inside of it and makes up the largest portion of the receiver's weight.
The DVD player sends a digital signal (foreign language to amplifiers, speakers, or any other analog device) to the receiver where it is decoded (translated) into an analog signal and proceeds to amplify the signal. You use the receiver to make surround sound adjustments, such as level calibration for each individual speaker. You also use the receiver to switch between different sources, such as DVD players, game consules, CD player, Satelite TV, or the built in tuner. The receiver also adjusts the volume for your speakers, aside from the ones in the tv that you probably won't use very often if you really like surround sound.
This is of course all very basic, the reality of what a receiver does is a little more complicated than what I have described, but so long as you have an idea of what it does.
Onkyo has one of the best reputations for easy to use receivers, so Onkyo is about the best for a beginner as far as user compatability. Be sure to refer to your manual when you start to make adjustments, you should probably read it front to back really.
What kind of speakers did you get for the surround sound?
