Krell HTS1...Upgradable or NOT?

I bought the HTS1 for the exact same reasons you did, in fact your wording is very similar to my previous communications to Krell. Their current upgrade program is to sell you a new 7.1 for $4000, with trade-in. (From their perspective, I guess the HTS1 IS upgradable...in my case for 75% of the original purchase price). That didn't cut it with me. Krell discussed it with me for a while, then got busy with the A/V show in Las Vegas. So I started in with my retailer. I live in Texas and here, misrepresentation is a very nasty word. The bottom line is my retailer is selling me a 2003 BLACK 7.1 for $2000 with trade-in. I can live with that, as I might have expected something close to that as an upgrade price, not to mention the multiple additional features the 7.1 has over the HTS1. I don't know what kind of history you have with your retailer (Krell dealer) but if you're still not satisfied with Krell's response, I'd start in with the retailer. They are as much on the hook as Krell. In my case, I had bought all my equipment for two houses from the same place (about $45000) over an eight year period. They see it as keeping a long-time good customer happy. Good luck.