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The 5500 comes with larger front speakers and as mentioned before, a larger self-powered subwoofer which requires a special subwoofer cable and a wall socket to plug the power cord into. If all you're looking for is something better then your tv's speakers then the 3500 would be perfectly...

In case you weren't aware of it, the 3500 (or any Onkyo system) doesn't include a dvd/bluray player, but that's a good thing. Buying the player seperately has many advantages. The 5400/5500 would be worth the extra cost but the 3500 is still a lot better than most of the typical all-in-one...