The 340 is an integrated amp. You can use it as a power amp (it has preout/main in jumpers on the back), but if I were you, I wouldn't buy functionality that I don't need.
I've used a C340 for many months, I think it's an excellent piece of gear. So, yes, if you can get it cheaper than you can find another 50W amp, I would say go for it. What amplification are you using for your front channels? You might try the NAD there as well, see if it makes a difference compared to your receiver's internal amps (assuming you don't already have external amplification for your fronts). Don't worry about it being "just" 50W, NAD amps are known to be much 'louder' than their numbers imply.
Why not buy an amp for your front two or three speakers ? If your going to buy an exteranl amp anyway you my as well get it for the fronts. I can tell you almost ANY external amp will beat recievers internal amps. You can get a used HK pa2400 2X170 amp for around 350.00, heck of an amp. Also if your front speakers are bi-ampable you could get the HK pa5800 80X5 300.00 and use four channles for your front towers with the fith for your center.
I'm assuming the HK avr520 internal amps are assignable, meaning you could assign the front two amps for your rears?
Thanks for the tip. I didn't realize that the internal amps were assignable. Apparently all I have to do is use some jumpers to re-arrange the internal amp configuration. I will definitely use the amp to power my mains and use the internal amp to power the rears.