In general, you're always going to get better sound from separates than you will from a receiver.

Even the best receiver is a collection of compromises. To make one, you have to combine an amplifier, surround processor, audio switcher, video-switcher, pre-amp, RF-Demodulator, and a tuner all in one tiny box. There's no way you're going to be able to make every one of those optimally fit in there.

This is not to say that there aren't good receivers out there (there are, and Outlaw makes one) but when you go to separates, you have the ability to specialize. A separate amplifier is only an amplifier. A tuner is only a tuner, and therefore, the odds are that they'll be better at what they do.

Compare a general practitioner to a medical specialist and you'll get the idea.

Another advantage of separates is that you can upgrade only the components that need upgrading.

Let's say you had a state of the art receiver, and Cindy (whom I just made up) had state of the art separates.

A new technology, Dolby Pro Logic III comes out.

You have to replace your receiver (including the amp, tuner, pre-amp, video-switcher, etc etc.). Cindy only has to replace her surround processor.

Because separates tend to cost more than receivers, you're not likely to save money in the short run (in fact, it'll cost you more), but it's likely to save you lots in the long run.

Jeff