I agree with "Reubent", unless the $500. budget is absolute, I'd look for a new receiver with HDMI v.1.3, room calibration, ability to handle new audio codecs, etc. If not, you're starting off with one hand tied beyond your back as far as future upgrades of other components (Blu Ray player, advanced audio codecs, etc.) There's lots to choose from for a couple hundred bucks more.
HT Receiver recommendation
Little by little I am upgrading my modest home theater. Just added an OPPO HD980 DVD player based on input from this board. I still have a (gasp) Yamaha Pro-Logic receiver, so I think it is now time to upgrade the receiver. I have pretty good Paradigm speakers all around, and need at least 100 watts/channel and at least a 5.1 unit, and I use a 42" Sony LCD TV. I am hoping to spend less than $500 on a used unit. I am thinking Denon, Yamaha, Rotel, Sony ES or something similar. I am really a 2-channel guy, but enjoy movies on a decent system with my family. What would you recommend?...and, thanks in advance.