Here's my take.
Hi Athlon,
First, the 607 at only $350 is a very good deal, no doubt about that.
Second, Audyssey MultEQ is quite a big step over Audyssey 2EQ.
Third, if you can found the Onkyo TX-SR705 (last time it was $440 at accessories 4 less, refurb), it has an even better Audyssey with MultEQ XT, the cream of Audyssey (after Audyssey MultEQ XT PRO).
If you can get away with 3 HDMI inputs, it is your best bet. And if you need more HDMI inputs, you can simply add an HDMI switcher for about $50 or so.
Fourth, best looking receiver doesn't cut it in my book. It's the sound, build quality, internal parts, Dacs, true power, best room EQ, features that really counts.
Fifth, Denon is nice, but they are of less value than Onkyo right now.
Finally, if I was you, or I'll get the 607 and put the extra money on speakers, or I'll get the 705 for a much better receiver at a very attractive price (only $100 more than the 607), with more power, Audyssey MultEQ XT and THX Select2, and still some money left for better speakers perhaps.
And if you still want to go further, look at the Onkyo TX-SR805 and TX-SR806 (both at $600 at accessories for less, and with the 805 being the very best).
So, recap:
#1 = Onkyo TX-SR805 -> $600
#2 = Onkyo TX-SR806 -> $600
#3 = Onkyo TX-SR705 -> $440*
#4 = Onkyo TX-SR706 -> $500
#5 = Onkyo TX-SR607 -> $350
#6 = Onkyo TX-SR606 -> $320
* Could be more now, but even if it's around $500, it still holds its #3 position.
And for other excellent deals, don't discard the Marantz SR7001 ($500), the SR6001 ($350) and the SR5002 ($350). But do look at their specs, as they are older and don't have all of the latest features.
The SR7001 will share the #2 position.
The SR6001 will share the #3 position.
And the SR5002 will share the #5 position.
That is from my own analysis and from my own extensive research.
And because of these heavy discounts, the Denon, the Pioneer Elite and the Yamaha receivers (which are also very good brands of receivers) will be of secondary consideration in this case.
[And all these prices are between $320 to $600, not more not less.]
** From your own budget ($350 to $500), I went $30 lower and $100 higher ($320 to $600) .
*** Accessories 4 less and 6th avenue still carry full warranty on their refurbs, and are two excellent places to do your shopping.
Cheers,
Bob