Without making specific recomendations -- and just to embellish whatnhas already been said -- you can think of things in terms of different "stages" or tasks that need to get done in the chain. Roughly in order, in order to get from your (we'll assume digital for the time being) media to noise coming out of speakers, you'll need to get the following things done: a mechanism to read the digital material from wherever it's stores ("transport"); a digital to analog converter ("DAC"), which can either be two-channel, 5.1 channel, 7.1 channel, and be capable of one ore more multi-channel codecs (ie, DTS, Dolby Digital, etc); assuming you have more than one source, source selection; volume control; and amplification (for however many of channels you've got).
Right, now each of these things can be done by a separate box, with a separate power supply, each designed to do their one thing as best as possible with minimal interference (on the theory that the jack of all trades is master of none, more or less). Or, one or more, or lots, of the tasks can be accomplished in the same box. Your average 5.1 channel HT receiver will include: a 5.1 channel DAC, a 2-channel DAC (which may or may not be the same as the 5.1), source selection, a volume pot, 5 channels of amplification, and likely a tuner to boot. Further, it will have analog inputs to bypass the onboard DACs, so you can use an external DAC (or the internal DAC on say, a blue ray player producing multichannel analog...); and it will also have "pre-outs" for each channel so that you can bypass the onboard amplification stages for one or more channels and use separate amplification. In short, a HT receiver does a whole lot of stuff, and also comes with the flexibility to delegate, so to speak, much of that same stuff to other equipment.
"Separates", however, come in all manner of permutations. If you were so inclined, you could find dedicated, single-purpose boxes for each individual task -- 2-channel transport, multi-channel transport, 2-channel DAC, multi-channel DAC, source selector, volume control, amplification for each discrete channel -- each in their separate inclosure, with their own power supply, and maximum isolation. "Separates." I wouldn't suggest it, but there you go.
The typical way your average HT receiver is whacked up into different boxes is to separate (a) the DACs, source selection and volume control into one box (the "HT processor"), (b) all amplification off board into either a multi-channel amp or separate "monoblock", single-channel amps for each channel, and (c) to ditch the tuner (want a tuner, get your own...). This will still leave you with some flexibility on the DACs, as it will also have multi-channel analog inputs. Which is to say, you could still bypass the onboard DACs (2, 5 or both) and use analog inputs in order to make use of an off-board DAC (either a separate box or the onboard DAC on a CD player, DVD, or blue ray...).
Now, at the risk of complicating matters way beyond their due for a first go, many -- well me, at any rate -- have concluded that spending coin on dedicated 2-channel gear is well worth while, while throwing coin at multi-channel gear so quickly arrives at the point of diminishing returns so as to, well, "cop out" pretty early on the veritable primrose path. Recognizing that this makes little sense in the abstract some particulars are in order.
My particular system consists mainly of a dedicated two-channel mess: transport (primarily Mac mini); separate two-channel DAC; separate two-channel pre-amp (source-selection and volume control only); and a separate mono block amp for each of the two channels. Voila. Now, running parallel to this, I have a HT receiver accepting digital inputs from each of a DVD player and the cable box. This means I am using the onboard, multi-channel DACs on the HT receiver to decode all multi-channel digital material (as well as any two-channel digital material either source happens to produce). Thus, the HT receiver is in charge of source selection (for those sources), DAC-duty, volume control (again for those sources), and amplification for only the center and surround channels -- the main channels use the pre-outs, which go into the HT bypass loop on the stereo pre-amp, and then through the monoblock amps and onto the main speakers.
As far as I am concerned (and yes, this is pure, unadulterated personal bias), two channel software / gear is really important. Nothing that is designed to pull double-duty as multi-channel gear will come close to being able to equal the quality, reality and emotional impact of dedicated two-channel gear. On the other hand, I look to multi-channel processing for the atmospheric bells and whistles. This, as far as I am concerned, demands and requires a sigfinicantly lesser degree of technological (and financial) commitment. Hence, dedicated two-channel separates mated with a HT receiver = (in my mind) having cake & eating it, too.
So, there you go. One opinion. Cheers and enjoy.
