You mean a preamp-processor without amplification that has all the film surround-sound formats and maybe a few for music as well--for $200-500? Sorry, out of luck. These animals are generally high-ticket, well-appointed items, more costly than most of the receivers that do many of the same things, while adding a tuner and amplification to boot. Unless I misunderstand you, you seem to be in the market for a budget receiver. Stay on the line. Someone who knows the ins and outs of that market will be along to assist you.
I would recommend used Lexicon DC1 with DD and DTS. You should be able to find it on ebay for under $500. It doesn't have to be the highest ver 4.00, but make sure it has DD and DTS upgrades which are mostly needed in watching DVDs. Lexicon's Logic7 is really good.
While researching A/V gear for my upgrade I looked into the following gear. These
are by no means all thats out there. These are the brands mentioned in this forum by
members who helped me narrow down my choices 6-7 weeks ago.
Yamaha HTR 5950BL (Lately on sale under $500. With shipping may be over budget)
HDTV compatible, XM Ready. I did listen to this in person, with my music test cd
(van halen debut), and it cooked. At the time out of my budget. This is a 6.1 or 7.1
Panasonic SA-XR57K (Around $450 at the time) A 7.1 receiver. I saw this unit but
never tested it. It's all DIGITAL, Yes the amp is digital, I've read a bit on this. This
format takes away any analog/digital switching or converting thats needed in most
other units. Also it's very small compared to the giant I bought and that most others
are(a plus IMO). If could have heard this I may have bought it. The power section
makes sense. It probably never gets hot, and should be durable. The sound was
the problem. This has HMDI in/outs, a big plus, if you have HDTV.
Harmon Kardon AVR435 ($400) You know that name, not much needed to say.
No HMDI, Not many bells or whistles, But sounds GREAT, atleast in music mode
which I tested.
Marantz SR6400 ($450-500) 6.1 Same as above. Great build quality, great sound.
Smooth is the word I use. No HDMI.
I don't like to use my own stuff for examples, but it falls into this catagory.
Pioneer VSX-1015 TX ($380 about 6 weeks ago) THX 7.1. No HDMI. 125W per channel.
I bought this for the budget aspect, great features. Before I got it, I was reading that it
did'nt play music well. That turned out to be wrong. It does home theater and music
very well. Power to burn (for a receiver) and easy set up. The back panel is layed out
in a way that "makes sense" which I appreciated. I've seen it now for under $300.
I've also seen it's replacement (VSX1016) for around $520.
Hope this helps at least narrow down your choices.