You'd be happier with a new receiver overall. Sony's consumer line of receivers leaves a lot to be desired, and you've clearly outgrown your current one. Perhaps an Onkyo TX-SR501 or 601, or the Pioneer VSX-D912K would suit your needs. Harman Kardon also has some good lower end receivers though...
I have experienced this just this evening with the DTS-ES soundtrack on the FotR Extended Edition. It only happened on disc 2, and only on the 2nd layer. It happened only in a few quiet scenes and was not reproducible. I have a Pioneer VSX-D912K and a JVC XV-S60BK DVD player, connected via coax...
There is actually no 7.1 DVD format yet for movies. The highest format right now is DTS-ES 6.1 Discrete, which appears on only a handful of DVDs. Dolby Digital EX and DTS-ES 6.1 Matrix both form the rear channel from a matrix of the surrounds. Whether you think it's worth it or not is certainly...
Buy some nice Sennheisers for dorm life and save making a few enemies. :D (Trust me -- been there, done that. I've certainly had my fill of listening to trashy KLH subs thrash about during my living in dorms.)
Best Buy is about one rung above Wal-mart on my chart. I find the home theater selection at almost all of them to be cheesy at best. KLH abounds at the BBs I've been in...that about says it all.