There are a number of articles across the Internet, including one right here at Audioholics about the all channels driven mythology:
http://www.audioholics.com/news/editorials/flushing-out-myths-in-consumer-audio
But, the bottom line is that quite often people, in an attempt to improve their system by purchasing something new, just make a big step sidways on some key areas. Power is one of these big areas which has not improved much over time.
This is true for several reasons, and power to the speakers is just one of those reasons. Speaker efficiency is a key reason as well, but I can tell you that even with a fairly efficient speaker, the driver configuration and actual quality can play a significant part of the output power.
Now, you did talk about turning it up halfway to get decent volume, but don't think of that as a bad thing. Often volume slopes are not linear, so you may find you get volume to uncomfortably loud volume levels before you max out the volume. Likewise, you may find that the audio quality starts getting distorted before you max out the volume of the receiver.
At the price you are paying for a receiver, you have a lot of product that is similarly priced, but there is also a lot which is more expensive. From a little bit more, to a lot more, so while you are in the decent entry level category, you are still looking at entry level product, which should curb your expectations somewhat for what to expect.
As for your neighbor with a Sony system, it's impossible to say what it sounds like or what audio quality he is getting along with that sound. Quite often smaller speakers can sound louder, and perhaps even be driven louder for certain frequencies but don't truly have the audio quality that more expensive components have even if they don't sound as loud, they may still sound far better.
Oh, and you might want to check out some articles on room acoustics... some people find that kind of important as well.
