How much better is Theta Cas 2 compared to Classe

I guess everyone has an opinion, so here's mine. I compared teh Theta and Classe products and went with the Theta CB II (w/ extreme DACs). In my opinion, the decision was not even close. The CB II is in a different league from the Classe piece, both in terms of performance and price. For what it is worth, I would encourage you to buy a Theta Dreadnaught amplified if you buy the CB. The two together are an outstanding combo. By way of background, I started out with your typical Sony receiver then upgraded to a Sunfire Theater Grand II, then to a Proceed AVP, then to a Krell HTS 2 (after comparing to a Classe SSP-75). I sold the Krell after hooking up a Theta Casa Nova. The cheapest Theta blew the doors off the Krell and, in my opinion, the Classe. Now that I have the Theta CB II, I do not think I will feel the need to upgrade anytime soon. In addition to the audio quality, Theta has an excellent history of offering real upgrades. In fact, you can take a CB I and, for a couple of thousand dollars, upgrade it to a CB III. Try that with a Classe.

Yeah, if you're doing HT, try to keep the quality all around! Ideally, same speakers all around, or at lest up front. Also, for best sound with those Joseph Audio's, make sure you either sit close enough(as in small rooms) to the speakers, so as to hear mor "direct sound", or make sure of acoustic treatment considerations, sure of ceiling treatment!
The reason I say this is those "open architecture" traditional "tweeter on top" designs tend to make you hear more ceiling interaction and floor interaction! Doing what you can to ensure a higher proportion of direct sound vs. reflected is critical for best detail, dynamics, soundstage acuracy and imaging, as well as dialog intelligebility.
As for processors, I don't think you're getting anything by going Theta. I never thought too highly of that processor line for movies. I sold both Classe and Threshold, as well as Krell, Meridian, CAL, Integra, and other higher end pre/pro's. I don't think the Theta has anything on your Classe. I think, at very very best, it's a sideways move.
If you like your overall sound, I'd stay put there.

if you do upgrade your amp, or buy the new processor, don't skimp on the center channel, since this upgrade is for HT. If you go with the better DACs up front, use them for all three channels. Or, If you upgrade your amps up front, upgrade all three channels.

I would upgrade your amps. ie, the Classe 2 channel amps should give you better channel separation and dynamics. There are a few CA100's and CA150's for sale right now.