Amp/Preamps vs. High end AV Receivers


Hi,
I am sure this topic had been discussed exhaustively. I am new to this arena looking for some help to upgrade my Onkyo AV Receiver (135 w/channel). I am debating whether to the AV route or the AMP/Preamp combo. Naturally, I understand that I get what I pay for.

Would appreciate some inputs and suggestions regarding:
1. AMP/PREAMP combo route - 
2. AV route

I am not looking at a huge budget but a decent one. 

Thanks in advance
terrancej
@terrancej

If you only add a power amp and use your Onkyo receiver as a preamp processor/DAC you won’t be able to achieve optimal improvement in performance cause you’ll still be using your Onkyo receiver as preamp processor & DAC. Preamp processor & DAC plays very important role in determining the overall sound quality of your setup system. One must upgrade the front end components (DAC & preamp) first before upgrading the power amp, not the other way around. What’s lost earlier in the signal path cannot be restored downstream.

I know you’re on a budget and I can recommend a slightly used Marantz AV8802 av preamp processor (discontinued) which can be had today at slightly less than $2k used. its original retail price was $4k. This pre pro supports 4k video, hdcp 2.2, Dolby Atmos DTS-X & Auro 3D. This will be a step up sonically than using your Onkyo receiver’s preamp/processor section.
The AV8802 sounded very good for the money and I would say it is the best sounding Japanese mass produced pre pro. Noticeably better than Onkyo/Integra, Yamaha or Denon processors.

And pair this Marantz AV8802 processor with the Rotel RMB-1585 five-channel power amp and you will be set and will drastically elevate the overall performance of your system to a whole new level of sonic performance.
The Rotel RMB-1585 five-channel amp is a class AB design amplifier and it retails for $3k new but often times you can find a used one in used markets for around $2k ish. This is a spectacular sounding multi-channel amp especially for the money and will sound way better than the Emotiva, Outlaw, or B&K amps or any other amps mentioned earlier in the above posts.
However, do not get the Rotel class D amplifier such as the RMB-1575. it isn’t the same as its class AB design such as the RMB-1585.

Or alternatively for your B&W CM8 speaker system you can get the Rotel RMB-1555 five-channel amp, which is a step down from the RMB-1585. The RMB-1555 is also a class AB design. The RMB-1555 retails for around $2k ish brand new or it can be had for around $1300 used.

Rotel amps will sound really good on your B&W speakers. Rotel always pair really well with B&W. They are meant to be paired together. B&W speakers (especially the CM series & 600 series) were voiced using Rotel amplifications. They have great sonic synergy together.
I strongly suggest you check out a Classe Sigma SSP Pre/Pro.  It was designed on B&W speakers when Classe was part of the B&W family.  Classe was shut down but I understand it is back up and running.   Balanced for L/R channels, single ended for rest to economize.  It partners great with a Classe Amp 5 (2 balanced or SE, 3 SE channels) for very good sound.  You should be able to get both for close to $5K used. You will likely want to upgrade your primary amp in the future but then you will have a really great 7.1 setup if you want.  There are a few of each of these currently available on Audiogon.  If you want to really round out the system, add an Aurender N100H!  Enjoy!  
@terrancej 

I wouldn't recommend the Integra DHC 60.7 processor. It wouldn't make a difference from the preamp processor section of your Onkyo receiver. 

The Classe Sigma SSP preamp processor and the Classe Sigma Amp5 five-channel amp that was recommended by psnyder149 above are great but they will cost around $6k used altogether in used markets. However, the Classe Sigma Amp5 is a class D amplifier, which is very good for HT but not so for music IMO. But the Classe Sigma SSP preamp processor is excellent and is optimized for stereo. It originally retails for $6k for the Sigma SSP Mk2 and $5k for the first early version of the Sigma SSP. 
The Classe Sigma Amp5 five-channel amp retails for $5k new. 
If you can afford this Classe Sigma combo it would be great and will be big step up sonically from your Onkyo AV receiver.