<font color='#000000'>Wow, I think I've responded to similar questions in this forum so many times since I signed up that I'm starting to sound like I work for Outlaw.
About 18 months ago, I was doing like you and looking at a new receiver in the $1000 to $3500 range. I had never had seperates and felt they were out of reach. Then I happened to read a review on the Outlaw 950 prepro in Sound & Vision magazine and started doing some investigating. What I found out was that there was not alot of negative. And, the price, I think I paid $2498 at the time for the 950/770 7-channel 200-watt combo, was far below anything that was comparable. I've had my units for almost 15 months now, with absolutely no problems, and I can't imagine anything sounding a heck of a lot better at any price. The 950 processes everything but Pro-Logic IIx, but it offers Cirus Surround that converts anything to 7 channel. Of course, if you are only looking at a 5-channel set-up, what good is PLIIx?
Also, while I see a previous post noted that the 950 was limited with respect to inputs, I've got a DVD/SACD/DVD-A player, VCR, Cable box, and CD recorder attached with room left. Unless, you have an incredible amount of equipment, it is hard to imagine there not being enough inputs.
At any rate, I would highly recommend that you look at their website, particularly the Outlaw Saloon, which is their forum. You'll find all kinds of discussion about the various equipment, including where people have experienced some problems with defects. Like any manufacturer, there are occasional defects and they invariably get discussed here. The equipment has a 5 year warranty, with a 30-day, no questions asked trial period. Hard to beat that. Plus, I am understating it when I say that their customer service and support is extraordinary. I was really worried about spending this amount of money on this kind of equipment for an internet purchase, but I can honestly say, unless you spend one heck of alot more at a boutique type of A/V store, you are not going to get the kind of service you can get from Outlaw. Certainly, not from your friendly neighborhood Circuit City, Best Buy, Tweeter, etc.
Nuff said on that. Read all you can on them outside of this forum. I think you'd be much more satisfied with seperates and have more flexibility in the long run. In your price range, the 950/755 200-watt 5-channel amp combo goes for $1995. The 950/7100 100-watt 7-channel amp combo goes for $1598. You could do the 950/5-200 watt mono blocks combo for about $2200.
With respect to your last question in your post. If you have a 100 watt/channel 7-channel receiver and only use 5 channels, it's still only 100 watts per channel.
Hope this helps. Good luck. Half the fun is looking and agonizing over what would best suit you.</font>