I don't think the issue of phantom speakers matters in an Atmos setup: so long as the real speakers perform well, positioning tricks using volume, phase, and delay should work as expected. Of course, you could not measure and correct a system like that based on phantom speakers.

This actually comes up in non-Atmos settings where one has multiple subwoofers. The problem is that one is trying to apply room correction to the LFE channel, and all one has to measure are the real subwoofers. It also means that one should do bass management before room correction. Most people use multiple subs to smooth out the room reponse, and then correct them as a single subwoofer. Of course, this only works from points equidistant from each subwoofer unless additional delay management has been applied (say with a DDRC-88A for 7.1 and another miniDSP 2x4 applying delay management between subs after the DDRC-88A. Alternately, a single DDRC-88A can manage 5.3 setups (L, C, R, LS, RS, and three subwoofers, oftern used in LFE plus stereo sub arrangements). There are successful 16 channel Dirac Live room correction setups using a pair of DDRC-88As after the pre/pre for Dolby Atmos. Check out the application notes on the miniDSP website (www.minidsp.com).

But, the big thing with Atmos is that the only decoders for it are licensed in (rather expensive) A/V preamps and receivers, and sources like BD players have to have their HDMI outputs set to bitstream instead of LPCM. That means no chance to do room correction with a nanoAVR HD or nanoAVR DL in the digital domain, except on the LPCM decoded TrueHD source as 7.1. (Atmos adds metadata to a TrueHD encoding so it can play on non-Atmos setups).

Finally, the big "secret" is that supposedly a lot of Atmos content, at least initially, is supposedly pre-rendered as to speaker location.

I've decided my living room, where I would be doing critical music listening WON'T have an Atmos setup. I'll stick to 7.2 at most, and will probably do Dirac Live processing and bass management with a nanoAVR HD (bass management, distance, and level) and nanoAVR DL (Dirac Live). It's more "audio friendly" in that it is done in the digital domain. I'll leave the possible use of multiple DDRC-88As to a future separate Atmos theatre.

[spoiler][/spoiler]Right. But what if the "TV" were another downstream "AVR". Could decoded 7.1 LPCM be sent? Recent research suggests no (2ch PCM) or whatever the source sends that the TV says it can handle.

No. But that is a matter of semantics. To me "bass management" involves directing low frequencies to subwoofers from other channels. The other issues subwoofers raise are very much a part of room correction.