the couch is pretty much on the back wall across from the TV.
This is a big issue for sound quality. The reflection that arrives at your ear from the wall really muddies up the sound because it's so close in time and amplitude to the the sound your brain was processing. I strongly recommend getting some absorption panels up on that back wall. 8 feet away isn't a huge distance so moving the couch much forward probably isn't a good idea, though the more space the better regardless.
I was thinking the surrounds could go on the back walls facing inward a bit.(Or on the sidewalls?)
Put them high up and slightly behind you, on the side walls aiming down towards you.
Do you think it needs to be much further behind for them to even be effective?
THe surrounds? Generally surrounds work best with
- multiple sources (IE 7.1 instead of 5.1)
- lots of diffusion behind you (to "breakup" the surround field)
- absorption on the front wall (so that minimal sound from the surrounds is reflected back towards you_)
- a coherent radiation in all directions (IE coaxial)
I'm not sure I totally follow that point, what makes the two amps so much different in this regard?
Like I said, I'm not familiar with any measurements on the yamaha. But Generally out of all the receiver amps claiming to be 100wpc, all are NOT equal. Generally you want amps that can deliver around 250wpc into a 4ohm load and most receivers, especially stuff below $1k don't fit the bill. The NAD is one of the few that comes close, though.
The sub I have currently is an old Sony SA-WM40 sub that I'm using. Maybe I'm just used to it, but it doesn't sound terrible for movies at this point. Is that as bad as you would have expected? Got any suggestions for some I should give a listen to for upgrade?
Listening to subs is a no go. The environment you would hear it in, and the setup, will dominate much of what you hear. But I suspect you can definitely benefit from upgrading to a truly good subwoofer in my opinion. Something that can hit 20hz, 110+db, and LOW distortion, and blend seamlessly to mains. I actually recommend two subs, because that will maximize your sound quality by minimizing the effect of the environment.