Speaker Calibration: Best via Avia or through Receiver's internal test tones?

Use the internal test tones.  Most likely these will be -30db reference.  Set the SPL meter weighting to C and response to SLOW.  You should get 75db from each speaker.  You may want the subwoofer a bit higher (the meter is not very accurate for the sub).  Maybe 77 to 80 db.

Too many variable with the DVD.

I disagree, use the DVD.  If everything is working properly, the results should pretty much be the same.  But using the DVD can expose stuff like if the receiver is one of the old ones that had issues with not boosting LFE 10 dB when getting PCM over HDMI.

More variables is *good*, because those variables will be present during actual movie playback and you want to calibrate based on what's going to happen during movie playback.  But if you do find a major discrepancy like the LFE down 10dB, then the receiver test tone is good to remove variables so you can figure out what is off, and how you'll have to adjust for different sources.

How do you know if your not boosting LFE 10 dB with the DVD?  What can you compare it too?

If your system does have this issue and you calibrate the sub based on the DVD, the sub will be 10 dB hot for everything else.  If you use the internal test tones, you are guaranteed that the levels will be correct.  Then you can test with AVIA if you like to determine if there is an issue.

Am I making sense or is it just past my bed time?

Doesn't your receiver also have an auto-calibration with a microphone?  That might be more accurate than the Radio Shack meter.  Probably should have started with that :).

I guess what I really meant to say was you should try multiple methods and see if you have glaring differences.  The Avia also is exercising the bass management since its test tone is in the actual 5 main channels, not LFE except for the track marked for LFE.  It would be normal for the Avia test tones to read higher since AFAIK they are supposed to be @ 85dB.

What's your "HDMI subwoofer level" set at in the receiver menu?  I think it should be either auto or +10db.
I would also test with the PS3 set to bitstream, see if there are differences with the receiver decoding instead.

Your channels seem level either method, so the only issue is the sub level, and in the end you should just go with what sounds good to you anyway ...  Radio shack meter I don't think is that accurate at the low frequencies.

Forget the SPL meter.  Does something about the auto-calibration sound bad to your EARS? 

As previously mentioned.  Most low-cost SPL meters are notoriously bad, especially on the low end.  It sounds like the meters that come with most of the newer receivers are much better and do a better job setting the proper levels than anyone could do with a handheld SPL and any kind of test tones. 

It also does not matter where the gain on your sub is set if it is producing the proper level of sound.  My 12" 300 watt sub has always been set on the low end of gain to get the proper sound level.  With the autocalibration, I would try to keep it within + or - 5.  Actually, I would think 0 would be the optimal setting, but personally, as long as it is less than 5 either direction, I would leave it be.

If your system just sounds bad with the auto-calibration, then, and only then would I look to another method.  Then I would use AVIA, through your DVD player (PS3) since that is how you watch movies.  Personally, I have always calibrated at something closer to my listening level, instead of reference, unless that is how you watch movies.  Unless your receiver has a good dynamic EQ program, or you have all identical speakers, your level calibration may not be level at your movie watching volume. 

Of course, this is all just one man's opinion and YMMV, but unless you have some very high level, calibrated equipment, forget the readings if the automatic calibration sounds ok.  With all of that said, I have had mixed results on a few auto-calibrations from one to the next, so it may take more than one run, or adjusting a sub location, adjusting speaker angles, making the environment absolutely as quiet as possible, etc to get the best result, but I would try that before going back to the SPL meter.

Instead of going into that whole, long history lesson (which can be easily found with a little searching), let me ask the other question - Why would there even be a reference level if all systems kept the same level balance throughout the level of volume? 

If a system had the same balance across speakers at say 25, 50 or 70, then there would be no need at all for a reference level as long as you picked some level and balanced everything there.  So, you could just balance at a lower level without scaring the kids and household pets.  Either way, if my premise is incorrect, then just balance at the lower level and you will still be perfectly in balance when (if ever) you crank it up to reference.  If I am correct, then at least you will be closer in balance at the level you actually listen...