First let me say that this forum has taught me tons about HT in the week I've been reading it. I currently have a Sony DVD, JVC 35 in. TV (6 yrs old-one tuner w/PIP), JVC Stereo VCR,and ATT Digital Cable. Which of these setups would be better for me at my desired cost (around $500 or so): 1) Kenwood HTB504 system ($499 at Circuit City) This is a HTiB system which I know is less desirable to most people here. OR 2) An Onkyo TXDS494 receiver and an HTD (Home Theater Direct) Level One speaker package (2 fronts, 2 rears, and a powered sub). Is anyone familiar with the HTD Level Ones? Would this system likely sound better? I'm told this Onkyo (despite low rated power--55 wpc) would be comparable or better than the Kenwood at 100 wpc. True? Lastly, will this connectivity work? DVD audio to Receiver via Digital Coax/DVD video to receiver with composite Digital cable box to Receiver with composites (Do I need audio and video composites?) VCR to Receiver with Composites (again, do I need aud and vid or just audio?) S-video from MonitorOut on Receiver to TV. Forgive my ignorance if this is totally wrong. I just want to get full advantage of Digital sound via DTS, Dolby Digital, ProLogic II when watching DVDs and tapes as well as still have good music playability (since current stereo receiver will be moved to the basement)and be able to get surround sound on the TV. Please help. Thanks.