What Do You Need?
This is the all-important question to ask yourself before buying a receiver. You'll need to figure out how many A/V inputs you'll need, what type of speakers you'll need the receiver to handle, and what surround formats you want to use.

Inputs:
Any receiver you buy should have enough A/V inputs to accommodate all the gear you currently own. For greater flexibility have at least 2 more A/V inputs than needed. This will be especially difficult for receivers priced below $500.

With high-definition source connections utilizing multiple component video and digital connections such as DVI and HDMI, the video switching capabilities/limitations of receivers has become extremely critical to finding the right receiver that meets all your needs. Getting a receiver that supports all those high-definition video connections can be difficult or downright impossible at certain price points.

At Minimum Your Receiver Should Have:

1. 3 digital audio inputs (coaxial/optical)
2. Speaker connections for all five, six, or seven speakers
3. Subwoofer output
4. 2-3 A/V inputs with HD Component Video options

For pricier receivers the minimum requirements will be easily met.
In the $800 - $2000 range look for:

1. Larger and better amplifiers
2. Better power supply
3. 8-10 A/V inputs
4. 3-5 HD Component Video inputs and Component upsampling in which all other video inputs route through the main Component output (this may exclude DVI and HDMI in all but high-end receivers)
5. 3-5 HDMI video connections
6. Better surround decoders, multiple digital audio inputs and outputs (Coaxial and Optical)
7. 6-8 channel input to support new digital audio formats
8. Binding post speaker connections
9. Pre-outs for all channels to allow use of an external amp
10. Support for 5.1-8.1 surround formats (just in case)
11. Audio delay capabilities to sync audio

Speaker Handling
Most receivers handle 8ohm speakers as they are the most common type of speakers available. Better receivers can handle lower ohm speakers, but receivers will run hotter and under more stress when using speakers with lower impedance. The reason for this is that speakers below 8ohms draw a lot more power, and possibly more than the receiver can handle. Driving demanding speakers on a receiver is possible, but it's dependent upon the quality of the receiver's amplifiers.

The Wattage Game
There's no set standard on how wattage is measured, with some manufacturers being conservative and others using "inventive measurements". Consumers are almost better off ignoring wattage completely. The home theater industry has become so competitive that almost any amp made by a name brand company will have adequate power depending on your room size.

The only time you'll need to focus on wattage is when you need a receiver to drive speakers in a large room. If you fall into this category, you'll need to make sure you have enough headroom and power for your amp to play your speakers in a large space. A large home theater would be any room that's around 300 square feet or larger with an 8-9 foot ceiling. If you have a volume ceiling you may also need more power to fill the room's volume with sound.

Surround Formats
All receivers will have both Dolby Digital and DTS decoding plus the new surround formats based on these formats. Many poeple will choose to go with a 5.1 speaker configuration, but if you want a 6.1+ speaker setup it's always to nice to have the option.

Also, many of the newer receivers will have the latest versions of Dolby Pro-Logic and DTS Neo which do a great job of making non-Digital Surround sources sound like Digital Surround Sound. These formats also have great music surround format that far surpass the sound quality of previous "matrix" surround sound formats.

DTS vs. Dolby Digital
Movies sound better by having more surround, more bass, and crisper sound with DTS. Many DVDs have come out with both Dolby Digital and DTS on them, but some titles have separate DTS versions such as Saving Private Ryan. The DTS versions almost always offer a better surround experience than Dolby Digital, but let your ears decide for yourself and purchase whichever format you prefer or is available.

6.1
Both Dolby Digital and DTS have come out with a 6.1 channel processing that adds a center channel to the surrounds. Most DVDs made today don't even support it, but these systems offer processors that can extract a center surround from the standard 5.1 mix.

The good news is that this format is backward compatible with the older 5.1 processors so those without 6.1 can still enjoy an awesome 5.1 digital surround presentation.

The upgrade price to a 6.1 system is large due the need for a new receiver, extra surround speaker(s), and another channel of amplification. Not to mention trying to physically place a surround speaker directly behind you.

Anyone who's heard or reviewed a surround system with 6.1 has cheered it's greatness. What you need to weigh against is how many speakers you are willing to put into your room. Not to mention that the 6.1 format sounds better when using two speakers for the center surround channel instead of one.

Note: You may not even need 6.1 surround if you're lucky enough to have an ideal surround speaker setup wherein you surround speakers produce a deep stereo image like your front channels.

A receiver (or new channel of amplification) and two speakers can add up to be one expensive upgrade. The rule of "try before you buy" definitely applies here.

High-Definition Surround Sound
The new high-def DVD formats also bring with them the capability of high-definition surround sound. Dolby Digital and DTS are compresed surround formats, and while they sound excellent, the high-definition surround sound versions sound even better. This is a feature many receivers may not have, and there's not many movies offered with it on HD-DVD or Blu-Ray.

You may want to look for this option if it's a capability you desire in order to "future proof" your receiver purchase. A 7.1 or 8.1 channel analog input may your best option for connecting a future high-def DVD player to achieve high-definition surround sound.

SACD and DVD-Audio
If you're an ardent audiophile, you can use the 5.1 inputs on your receiver to connect a DVD-Audio or SACD equipped DVD player. Both formats offer great high-definition music that many audiophiles swear by, but the greatness of these two formats has met resistance/reluctance by the general public who hears no difference (or simply doesn't care) and audiophiles who've lost interest in purchasing $20 audio only DVDs.

While both are fun formats to play with, an SACD/DVD-Audio format isn't likely to replace the tried and true CD format or the new kid on the block... MP4 via Apple's hugely successful iPod and iTunes which makes CDs seem clunky and inconvenient.

Sound Quality
Features aside, the most important quality of a receiver is its sound quality. The number one reason to buy an A/V receiver is for the sound quality it brings home, and all brands aren't created equal.

For people on a budget, expandability may need to be given up for better quality sound. For those with a lots of money to spend, the temptation to get receivers with options you'll never use is high. Sometimes these "overpacked" receivers offer less sound quality than other similarly or lesser priced models with less gimmicks.

Many manufactures pack the receiver with too many calibration tools for anyone to use. Some features don't even make sense unless you have the right tools to measure the sound output. Also, money that could be spent on better amplifiers is instead wasted on useless options. Avoid "gimmick gadgetry" and focus on receivers that offer better sound quality and the connections you need.

Sound qualities to look for:

1. Open airy sound, clear imaging and depth to the sound stage
2. Unstressed and clean sound, even at high volume levels
3. Smooth, non-edgy sound
4. Natural Sound (Vocals are the best test for this)
5. Non-metallic/ringy sound

A general rule of thumb is that more expensive receivers offer better sound. The sound qualities listed above apply to both budget and high-end models. With budget gear expect to trade options and features for sound quality or vice versa.

Evaluating
The store's environment will play an important role in the sound you will hear when evaluating different receivers. The best way to review is to remove the store from the equation and take the receiver home to evaluate how it interacts with your system. Many dealers will offer this convenience whereas the mass market stores do not. For the stores that don't, you can rely on their return policy, or see what other consumers think online at www.audioreview.com or various other home theater consumer review web sites.

Suggested brands (listed in alphabetical order):
$200 - $600: Denon, Harmon Kardon, Marantz, Onkyo, Sony, Yamaha
$600 - $2000: Denon, Harmon Kardon, Marantz, Outlaw, Pioneer Elite, Rotel, Sony, Yamaha
$2000 and higher: consider getting separate components