HT and high end 2 channel together .... it can be done, but it ain't cheap.
I started with a similar setup to yours and have done so much upgrading that I literally have two separate systems in one room. That said, here are some of the things I have learned along the way and how I married reasonably high end HT and 2 channel.
1. Front speakers: Start here. Listen to the very best speakers your budget can afford in a two channel format first. (Your going to then build your system around those speakers.) But ....if your room must be used for both HT and audiophile 2 channel listening be aware of WHERE the front speakers will be placed. (Most wives, kids, etc. can't tolerate speakers set out from the front wall too much.) This becomes even more problematic if you've got a big screen RPTV sitting between the front speakers, as many otherwise great speakers sound like BestBuy B stock when stuck between a TV and 2 inches from the front wall. Case in point, I once heard an awesome $60K Krell/Martin Logan HT setup at a local dealer. The Logans were set up perfectly about 1/3 of the distance from the front wall. I asked the dealer to move them back (about 16" from the wall) to simulate how they would be in MY room. The sounstage collapsed faster than a 3rd World government, bass, or what was left of it, was muddy and unconnected. Too bad -- I really liked the Logans. So I ended up buying Kef Reference 4's, not quite as sweet as the Logans, but they are able to tolerate typical HT positioning much better than a panel speaker and have a larger sweet spot.
2. You'll then need to match centre and rears to whatever fronts you choose. (For me that meant Kefs all around). (B&W and Dunlavy are also a good choice, and I think their centre channel(s) are amoung the best, but your into $20 -$40 large to do it right). Six Dunlavy V's are what Wide Screen Review are using in their newly constructed reference room, but if you can afford those, then you can also probably afford better advice than mine!
3. Keep the 2 channel and home theatre system separate. In my opinion, only the very best multi-channel stuff such Classe, Krell, etc. sounds any good for 2 channel -- and I'd still put a nice set of BAT monos or my Aranov tubes up against almsot all the solid state multi-channel amps for two channel. So that brings us to Step 2 -- invest in a high quality 2 channel separate amp and preamp. Hook NONE of this up to the Denon or whatever HT theatre receiver you have, unless it has preamp and poweramp pass through. Even so, I'd prefer to keep the high end separates, separate from the HT stuff! Instead, run a second set of speaker wires to your fronts from the 2 channel amp. (If you quessed I'm running two systems here, you are correct, the only comonality is the front speakers)
3. Your Dennon is excellent for HT, with much flexibility and enough power. I have a Marantz 14-EX whcih costs as much as some decent separates and is reasonably musical. But I dare not use it for 2 channel. I was going to sell it and go with Aragon or Krell multi-channel stuff, but the Marantz was so easy for the kids and wife to use and was par excellence for HT, besides having the best remote. So I sold the Aragon and bought Aranov mono blocks for two channel and I now have the best of both worlds. For seven channel THX-EX the Aranovs drive the front channels- simply by moving over the RCA cables (Cardas Golden Cross) from the 2 channel preamp to the Marantz. Of note, a second set of speaker wires (Nordost Red Dawn II's) keep the Aranovs totally separate from the Marantz when driving my Kefs for serious channel lsitening. A Sony SCD-1 on Black Diamond Racing Shelf is the front end, and when I can afford it, a Levinson 360s DAC for Redbook CD will round out my two channel set-up. The best of both worlds. I'm not sure... but damm close. And finally, you'll need a electrician. You dare not plug those wonderful tube monos into the same noise infested outlet as all your HT. (I run a Monster Power Conditioner for HT and AudioPrism for the two channel stuff on separate outlets).
I know this set-up sounds strange, but short of six monoblocks feeding six Dunlavy VI's, I have not found a better way to get good HT and audiophile quality 2 channel in the same room.
The key to this system is the Marantz which is so very close to separates anyway and has huge flexibilty. The other things that make this set-up work so well are: (a)two sets of speaker wires that allow me to run two systems (one for HT and one for 2 channel) into the same front speakers. (b) good speakers that can tolerate the non-ideal placement between a TV and 16" form the back wall (c)the Sony SD-1 that has relegated the HT stuff to the wife and kids because I can't stop lsitening to SACD. (d)Grado RS-1 and RA-1 headphone and amp when the rest of family wants to watch TV (the Grado RA-1 hooked directly to the Sony is awesome) and finally...(d)a credit card with a high limit to pay for all the experimenting I've had to do to acheive this. Now if I can just trade those Kefs in for 6 of Mr. Dunlavy's finest ....
