A prepro and seperate amp replaces your receiver. Basically, it seperates out the preamp functions from the amplifier functions. With a receiver both functions are in the same box.
The advantages are mostly in keeping the power supplies seperate. The amps tend to be more robust, and the preamp section tends to be less noisy.
One other advantage is that you upgrade more easily. A good amp can easily last you 20 years, but processor technology seems to have a much shorter shelf life. In a few years if you want the latest and greatest, all you need to do is upgrade the preamp.