The Audio Video Receiver is basically an electronic component designed to amplify sound from different audio sources as well as direct video to your television from different video sources. Inside it are a series of processors where the AV Receiver translates the digital or analog signal into a multitude of sound format, such as Dolby Pro Logic, Dolby Digital, and DTS, which is the current standard for AV Receivers. These digital sound formats can be decoded into separate sound channels and allow a specific sound to be played on a specific speaker channel.
The most preferred method by audiophiles in creating a home theater system is by acquiring multiple multimedia components and assembling them together. The only drawback with this method is if you are not familiar with different components and brands, you will have a hard time deciding, or worst, being led by sales people into buying low quality components. However, if you know what you doing or know someone who can help you choose the right matching component for your system, then you will without doubt have a killer home theater system that can deliver high quality audio.
One way of having a home theater system without having to go through the trouble of assembling multiple components is by purchasing an HTIB or Home Theater in a Box. This is a complete package where speakers, multi-channel amplifiers, Blu-ray/DVD player, are bundled together. This is considered the most basic way you can enjoy and experience home theater without having to bother with component compatibility.