L7, in my view it would definitely be the better move to put the 1050 upstairs rather than getting a two channel amp or receiver. It will work even better driving only two speakers, and its features, while getting somewhat dated, are still more complete than most of the two channel items that you could get.

Then, for your HT system, I'd suggest that either of the Denons that you mention have better features than the Outlaw equipment and would be a better choice.

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Enjoy the music, not the equipment.