Well, I know for a fact that you won't get the rated power output from it, I've seen tests before..

But anyway, i've had my Sony STR-DE585 for a few years now and I must say it's fine for my area.
Obviously Onkyo would be a lot better, but that's more money..

I really like the layout of all Sony recievers. I like how they function. There is always a subwoofer mix, even just listening to music with Pro Logic II turned on. I don't know how many models don't do this, but I know of a JVC reciever that will never turn the subwoofer on in Pro Logic II mode unless you have some speaker set to 'small' mode.

Make sure the speakers you want to upgrade to are compatible with the Sony (ohm rating) and if you're using a smaller room, you should be fine.

Mine is in a 10 x 12 room, driving (2) Polk R15 bookshelves for mains. They are rated at 100 watts, and even though tests say that the Sonys dont put out the power they're rated at, My sony can make the Polks crackle. I have a Quest center channel which I plan to upgrade, and two Acoustech Labs rear speakers along with an 8" subwoofer.
Not a great system for big rooms, but for this size, man it wails! High quality, high power for the room. Sounds great and can really go plenty loud for this room, and beyond :P

I don't see why you shouldn't keep the Sony. Mine's functioning perfectly. Just be sure you have enough inputs/features you want.