Need advice for HT LCR and HT Processor Upgrade


I am ready to upgrade my HT setup and would like some advice. I currently have the following equipment and am thinking the first thing I would like to do is upgrade my processor and speakers.

NHT LCR VT-1. I have had these since 1994.
Sherbourne Amps for 7 Channels.
Thiel Powerpoints for all four surrounds.
Velodyne DD 18 Sub
JVC Projector with 84" screen
Pioneer THX Select Receiver. I have owned several processors over the years including Lexicon and B & K, but grew tired of the high initital cost and massive devaluation as technology advanced.

I primarily use this for HT, but would like speakers up front which are good for 2 channel. I really enjoy speakers which handle jazz vocals and are really clear with guitar strings.

I have a budget of 3k for this upgrade. Should I pour most of it into speakers and get a used processor, or should I just stick with a receiver and use the Sherbournes to power LCR?
mm2862
I'd consider the Marantz AV8801 or the upcoming replacement the AV8802.

You should see improvements with a dedicated pre/pro vs an AVR but more importantly, the Marantz incorporates Audyssey MultiEQ XT32 (and Pro compatible) which would improve the room EQ significantly over the old Pioneer you have.

You don't need an AVR since you are using an external power amp for all channels anyway.
I'd put the money in the speakers. Your power amp is probably ok. I am assuming that you are using the Pioneer as a pre only. You could just get a universal player like an Oppo and dispense with the whole preamp concept, but I'd upgrade thye speakers first and see what you have after you do that.
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I would highly recommend getting a set of Thiel front ends. Either 3 MCS1's (which is what I use for my fronts/center) or a MCS1 for the center and a pair of CS2.4's (or CS2.7's if you're looking new, but the 2.4's are just an amazing value when found lightly used). I'm using my CS2.4's in my 2-ch setup.

I would stick with a very good pre/pro and use the amp you already have. The Marantz AV8801 is a great recommendation.