You are 100% correct, the Philips is a receiver, my point was that most people in an audio/video forum would think in terms of your audio setup as an older "5.1 home audio system" or older "HTiB" (Home theater in a Box) and using those terms would help those on the forum better understand your audio setup.
One problem is that your Philips receiver powers the sub-woofer, chances are any separate receiver you buy will not come with the ability to power the sub-woofer, most receivers send a signal to a self powered sub-woofer.
So you would have to buy a separate sub-woofer with whatever receiver you choose to get.
Personally I would not buy a Sony receiver, part of the price your paying is for the Sony name.
A decent chuck of the cash you pay for the Sony goes towards Sony's marketing department, not the cost of building the amplifiers inside the Sony receiver. I'm sure the Sony would make a very decent receiver for it's price.
But I would would think a company dedicated to audio (like Denon) might offer a little better sound quality, for the price.
Off hand I do not know enough about each Denon receiver to make a recommendation
I own a Yamaha receiver (RX-V671) and I would have no problem buying Pioneer.
Chances are a that a CS4398 DAC chip is going be better then whatever is in the Philips (or the motherboard), so at least for $65-$80 (per sound card), you should notice an improvement in audio quality.
Thanks. I didn't think of what others may think it to be rather than what it is but a clarification probably would have helped. I actually bought it back then for the optical input and speaker design. I was pleased to find that the speakers were of high quality and even more surprised that the analog inputs have a use even now.
Thanks for the input on the subwoofer. I actually do have another active sub woofer from what was a htib so that's not a problem.
Although their prices are usually inflated for the brand name, I mentioned Sony 7.1 Receiver STR-DH520 as there is a new one on sale locally with 33% below the price on Amazon which seems good. I personally like Yamaha myself too but unfortunately they are not on sale and I'm not sure the extra expense would be worth it given what I have. Do you think the Sony's worth it given the discount and what I have or would you still recommend a sound card?