A/V receivers
Audio/video receivers differ quite a bit from old stereo receivers, as almost all receivers offer 7.1 channels along with video switching. One of the biggest differentiating features on receivers these days are HDMI capabilities, and you'll need to read the fine print to figure out exactly what the receiver can and cannot do.
Receiver price brackets: Entry level (under $300) | Midrange ($301 to $600) | High-end ($600 and up)
Entry level (under $300)
Upside: Nowadays, entry-level receivers have just about everything anybody needs for basic home theater.
Downside: Lightweight build quality; inflated power ratings; lacks more advanced functionality, like HDMI upconversion; poorly designed remotes.
Entry-level receivers can handle the basics pretty well. Almost all of them offer 7.1 channels and come with the standard array of Dolby and DTS surround-processing modes. Power ratings run from 50 to 100 watts per channel. In this price range, many of the ratings are inflated, so the specs aren't a good way to judge real-world performance.
Connectivity options are usually adequate for most systems, and receivers in this price range are even starting to include HDMI connectivity. Be sure to read the fine print though--most receivers in this price range may not accept audio signals via HDMI and probably won't convert analog video sources to HDMI output.
Midrange ($301 to $600)
Upside: Features galore; plentiful connectivity options; potentially strong HDMI functionality; midline receivers are more solidly constructed than entry-level models.
Downside: More expensive; systems can be fairly huge and hog too much shelf space.
Beyond the now-standard Dolby Digital/DTS surround-processing modes, some receivers in the midrange offer onboard Dolby TrueHD and DTS-HD Master Audio decoding--the two new high-resolution soundtrack modes available on certain Blu-ray and HD DVD discs. There's a lot of confusion about these new formats, and for now, onboard decoding is more about future compatibility than a must-have feature for today, since currently you can listen to these high-resolution soundtracks only by letting your HD DVD or Blu-ray player decode them.

Also, thanks to their superior digital processing capabilities, midpriced receivers offer better synthesized surround modes such as Jazz Club, Rock Club, Cathedral, and so on that can be used to "open up" the sound of stereo recordings.
Onscreen displays (using your TV) are available at this price point, easing surround setup and general navigation chores. Programmable remotes control TVs and other AV components, while more-expensive models employ LCDs or keypads to make universal remote setup easier.
Better receivers also have more inputs, along with the ability to upconvert analog sources to the HDMI output. This is convenient, because you can leave your TV tuned to one input, and select which device you want using just the receiver.
High-end ($600 and up)
Upside: At this price range, expect honest power ratings, up-to-the-second features, and great sound quality.
Downside: An overabundance of features can mean overly complex setup chores.
In a perfect world, power ratings would give some indication of the loudness potential of AV receiver. But unfortunately, not every 100-watt-per-channel receiver is created equal. What's inside does make a difference, and beefy power transformers and capacitors are not only heavy but also expensive; that's part of what you're paying for here. And while the THX certification is mostly a marketing gimmick, it's usually a sign of more-honest power ratings--although you shouldn't pay more just for THX.

Higher-end receivers usually offer extensive multiroom capability, allowing you to listen to difference sources in different room in your home.
High-end receivers also come with the latest HDMI capabilities and often more than two HDMI inputs. Lots of HDMI inputs are nice, given all the high-def sources available these days, but those on a budget should check out an HDMI switcher to expand their HDMI inputs on the cheap. Receivers above $1,000 often also include top-notch video processors, providing the best image quality on upconverted analog sources.
