Hi Maclover . . . well now things are starting to get hairy. With the setup as you describe it, you cannot listen to one pair of speakers with the equaliser and one pair without at the same time.
What I'd suggest you do is to split off the secondary, "remote" speakers from the rest of the system. Connect your C26, source components, and equaliser as described above, but connect your "main" speakers (the XR7s)
directly to the MC250.
Then, take all your other speakers and connect them via the Niles switcher to a second receiver or integrated amp (maybe pick up a late-1970s Japanese unit for cheap?). Contact Niles for a hook-up diagram if you're unsure how to do this. You can then connect the second set of tape outputs ("tape 2 out") on your C26 to the "aux" input on your second receiver -- and leave this receiver on "aux" all the time.
Now, the equaliser will only go to your XR7s, and to "light up" the rest of your speakers, simply switch on the second receiver. Whatever music you're playing on the C26 will play through the other speakers as well, and you'll also be able to control their volume separately.