I'd stay very basic on the features you look for - good Dolby Digital decoding, DTS support if it matters to you, Dolby Pro Logic. I wouldn't worry about anything more than 5.1 channels as, once you do, you start creeping back into features that draw you closer to a current processor, and therefore more $$$. Map out what you're going to connect to it and be sure you have the right connections (inputs) to support it. I'd make sure that there is switchable S-Video support, as you don't have to go back very far to find this NOT on a processor, but S-Video is a dramatic improvement over composite. I'd also check out the bass management functionality, as many pre/pros don't have very flexible options. I would not worry about THX certification, though that's a big marketing item.
To be honest, if this is pure HT and you're really going for mid-level, I'd look for a slightly later model, but used, Denon receiver - you'll get performance that is definitely at least mid-fi, decent looks, more features, excellent build quality and a less complicated set-up (and therfore cheaper). If you really want to go the separates route, for $1000 (give or take) you should be able to pick up an Accurus ACT-3, a B&K 4090, or a Lexicon DC-1 (probably a bit more). -Kirk