So I am finally going to be jumping on the HD bandwagon (likely a 50" panny plasma) and therefore I will be upgrading my cheap receiver that does not even support component video to something that gives me HDMI.
I am trying to keep costs as low as possible (<500 USD) for the receiver so I have been looking at various deals on refurbs which leads to my real question. A few of the older AVRs I am looking at do not support the new hi-def audio formats found on Bluray. Should this concern me; is it stupid to replace my old receiver with one that will not decode these?
I realize if I went this route it would mean that when I end up getting a Bluray player it will need to do the hi-def audio decoding in the player and then pass the decoded signal to my receiver. Does this affect the sound quality in any real way? If I had an AVR that was doing this decoding would it sound better?
My other thought is that as more and more Blueray players come out, do more of them support this decoding or is it restricted to the more expensive models?
Since you can get the new formats for less than $500 in a receiver, I think there is no good reason to buy a receiver without them, given that that is your price limit.
Some Blu-ray players decode some of the new formats, and some decode them both into multichannel PCM (to be sent via HDMI only) and multichannel analog (via multiple RCA type connectors), but some only do one of these. Given the tendency for the decoders to be increasingly common in receivers, my guess is that in the future, fewer players will have built in decoders, as there is no sense in having them in both the player and the receiver.
Also, if it is built into the receiver, the setup will be easier, as you will just set the balance and so forth in the receiver, and need not deal with a separate setup from the audio in the Blu-Ray player, which would probably be necessary if one is using multichannel analog connections. Also, players may not have the same ease of setup, as most decent receivers these days have a microphone and automatic setup; I know of no player that will be that easy to set up. So even though there should be no difference in quality between having it decoded in the receiver or the player, there is a good chance that there will be a difference in practice, as the setup options are more likely to be limited and more difficult with using decoders in a player. The multichannel PCM HDMI would probably not be a problem, but, still, I see no reason to not get the decoders built into the receiver at this point in time.
So, again, if it were me, I would absolutely not even consider a receiver that would not decode the new formats, unless I was so poor that I could not afford one that could do this. And even then, if I already had a receiver that decoded Dolby Digital, I would just keep what I had until I could afford a receiver that could decode the new formats. But given your price range, that isn't applicable to you.