Upgrade for TrueHD and 5.1= Better sound or worse?

Hi, I am a newbie that is just putting together my first system.

I have a pair of Usher BE 718's, a Squeezebox Duet, a Tube Audio Design Dac and Preamp and Tube Audio Design (actually solid state) monoblocks.

I will likely purchase Anticables, Lessloss power cords and GIK Room panels.

I am also in the process of buying a Blu ray player. I have an old Harman Kardon AVR 230 from 2004 (no HDMI).

First of all, how would True HD sound on a 2 channel system with the Blu ray player doing the processing? Would it still be a "HUGE" improvement?

I am thinking about the following upgrades:

Onkyo receiver that processes TrueHD through HDMI (about $300 either used or refurbished)

I added the cost of 6 pairs of interconnects-- even through Blue Jeans, at least $190. May as well just spend the extra $100 and get it through HDMI.

That is unless i can just use 2 channel analog outs to my pre and get 90% of the improvement (don't neccessarily really need the surround sound, but also thinking about it.

Purchase rock bottom cheap surround speakers, center and sub. Thinking like about $100 per speaker used, or about $400 and all Blue Jeans speaker cables.

Will use only for home theater/Blu rays. Will this be a huge degradation in sound quality, or will the surround sound and Onkyo receiver be a huge upgrade?

If i use 2 channel, all music goes through the DAC. Would this be better sound using the 2 channel analog outs, or better to use an Onkyo receiver with monoblocks connected to the pre-outs.

Also will buying $100 speakers for surrounds, center and sub a waste of money?

Cost of upgrade:

Onkyo receiver $300
4 speakers $500 ($400-$425 plus shipping)
3 sets of speaker cable, 1 subwoofer cable $110

total cost: $910
minus cost of 2 pr interconnects $60(Blue Jeans) or $200 (anticables)

$850

Thanks for your help.