My experience is just the opposite as the poster above, for two channel performance. The latest version (ie. 2008) of the Krell HTS 7.1 had what was/is primarily their KCT preamp as the two channel, direct preamp section. This is a highly regarded preamp (for two channel). But this goes more to show it is a matter of personal opinion.
On the aspect of surround sound, neither one of them are anywhere near what you can get for this purpose, but both are dirt cheap compared to their original list prices (perhaps that says something about the value of Surround Processors more than anything). At least with Krell's processors, they have historically been a day late versus the up and coming technology. This may just be the case where buying the "name" doesn't pay off very well.