Timmy,
Yes, an AV receiver will be entirely adequate for your proposal, and it will be the most inexpensive (and cost-effective) way to go. I second JohnK's suggestion of the Elite 55TXi or Yamaha 2400. Both of these receivers (as well as most others) have lots of features, but you WILL actually use many of those features -- I don't think your money will be wasted on something you don't need.
Incidentally, Sony has announced the successor to the HS10, called HS20, which will come to the dealers soon. I understand that it is a vast improvement on the HS10. Also, Panasonic just announced the AE500, the 720p version of the popular AE300. You should definitely consider these new LCD models, too.
