As an AVP owner, this was great news when we first heard about it last year.
As for the price, ouch, but totally worth it.
Denon provides free firmware updates, and I've applied seven or eight since I purchased my unit in '09.
Now, in '12, paying $1K (installed) for a totally new DSP board (with four current gen DSPs), labor and all that is completely reasonable IMHO.
XT32 alone is worth the price of admission. I even paid $700 for the Audyssey pro kit several years ago and that was worth it then, and now can re-apply on top of XT32 to get the ultimate our of what is (after the update) the best pre-pro on the market.
Kudos to Denon for supporting us enthusiastic owners and keeping this unit up-to-date.