It can be done, but...
It can be done. but you have to set your proprities up front and be aware that for the same dollars, you can buy two great speakers OR five middling' speakers.
Likewise, you can get one heckuva two channel amp for the price of a 5 or 6 channel HT receiver, although the specs on the HT receiver will appear to blow the two channel unit away.
Don't believe the HT specs. They are not the same as stereo specs. HT specs follow different rules than two channel units and are, let's say, more "liberal". ...not too different from theway they rate automotive sound equipment.
A stereo amp rated at 50 wpc will probably produce more clean sound more dynamically than a multi channel HT receiver rated at 100 wpc. There may be a few exceptions, but they are far and few between, and they still cost a LOT more than the similarly speced competition.
In any case, when you shop, shop for speakers that play music. Not speakers that just do HT. They are a dime a dozen, literally. A speaker system that does a good job on music will do a good job on HT as well. It doesn't always work the other way around.
HT depends to a great extent on the boom and sizzle effect. Not too many people have experience with helicopters flying around their head, Tyrannosaurus Rex's stomping around their living room, Light sabers and surround gun battles. Loud seems to be the order of the day and people just love those surround sounds.
Almost any subwoofer can be used with almost any tiny speaker and produce an exciting audio experience. Notice I didn't say musical or realistic?
That's why so many people are satisfied with HTIB, at least until they start to seriously listen to music.
Oh, and don't count on any of those DSP modes to really enhance your two channel musical experience, at least for music recorded in two channel.
Some may be "decent", but don't expect an epiphany. It might be interesting but it won't be ehat they promise.
Now, multi channel Hi Rez is a different story. That was designed for multi-channel systems/
When shopping, listen to music on the speakers first. Then, when you have selected your speakers (two or five, six or whatever), look for an amp/receiver capable of driving them.
Now, I went the seperate two channel route simply because I already had a decent two channel system and it wasn’t really feasible to upgrade it to HT. For HT, I took the exact same approach I just described. Music is my first love and movies are a pleasant diversion. The HT system spends more time playing music than it does movies. Although I wasn't about to spend as much on my HT as I did on my stereo, it was mandatory that my HT system provide satisfying musical reproduction and be fairly cheap (hey, I’m a bottom feeder, OK?)
In case you are interested, this is what I came up with.
http://cgi.audioasylum.com/systems/1606.html
I won’t say it’s as good as my 2 channel system, but it does sound pretty durn musical. …and it does multi channel which is something the other doesn’t. Granted, there are a lot more expensive and, I’m sure, better sounding but, for the price, I doubt you would be too disappointed, but everyone has differing tastes.
So, set your priorities, set your budget and listen around for the speakers. The rest will fall into place.
Enjoy...