With all the recent changes in home theater, especially with the advent of Blu-ray and the now-defunct HD DVD, the AV receiver has gone through major changes in the past few years.  Denon, one of the best-known names in receivers, has more than kept up with these changes and now makes the $599 AVR-789, their cheapest receiver, which will decode all the new codecs and do far more than you'd expect at the price.

The AVR-789 offer three-to-one HDMI 1.3a switching that can handle the new lossless codec, both from bitstream and LPCM, as well as all the legacy formats.  For video, it will scale all sources up to 1080p and includes Faroujda's DCDi processing.  That would be enough to get most people to be happy at this price, but Denon has added Audyssey MultiEQ room correction and auto set-up, as well as Audysey's Dynamic Volume and Dynamic EQ to boot.  The seven channels of amplifiers are rated at 90 watts each, and can be configured for a 7.1 system, or as a 5.1 and stereo power for a second zone.  The AVR-789 is also XM radio-ready and capable of controlling your iPod with the add-on docking cradle.  All these features come with Denon's new elegant graphical user interface (GUI) and an excellent remote to control all that luscious sound Denon is know for.

High Points
• While this receiver is budget-priced, it offers features not found on many much more expensive models, including all the Audyssey goodies from room correction to volume control, making this a steal at the price.
• The fact that you can appreciate all the uncompressed goodness from Blu-ray and HD DVD for under $600 makes this a landmark receiver at an unbeatable price point.
• Denon's new GUI is much easier to navigate and far more elegant to use than the one it replaced and makes set-up even easier to accomplish.

Low Points
• The AVR-789 doesn't offer preamp outputs, so if you need more power in the future, you'll have to replace the receiver entirely.
• Power supplies are some of the most important and expensive parts in AV equipment and, due to the low price of this unit, it can't be expected to have the fortitude to blow you away in large rooms or with inefficient speakers. For medium to small rooms, power should not be a concern. However, do try to match efficient speakers with the AVR-789, as you can't decide to add a multi-channel amp later.
• Three HDMI inputs are plenty for a simple system, but they aren't enough for more complex home theaters.

Conclusion
The Denon AVR-789 is a feature-packed AV receiver for a super-bargain price.  For under $600 retail, not only can you enjoy all the uncompressed audio goodness of the new high-definition discs, but you get the full Audyssey package of room correction, auto set-up, Dynamic Volume and Dynamic EQ.  Video scaling up to 1080p with Faroujda processing is there, too. All these features are controlled by the new GUI. Top it all off with Denon's new curved fascia and you have a home run at twice the price.  This unit is a steal for the asking price, much less what it can be had for on the street.