I'm not even sure that adding a receiver would fix the problem.
Actually adding a new receiver would fix the problem. All you do is connect the speakers and subwoofer that came with the HTIB to the new receiver. There are exceptions of course, having to do with the power rating of the receiver/amp and the efficiency of the speakers being used, but in the relative price point you are likely looking at this should not be an issue.
One other question: I was wondering what the consensus was with regard to the difference in quality (if any) between the upconverting capabilities of the PS3 vs a regular upconverting DVD player?
It seems the general consensus is that the PS3 does a very good job of upscaling DVD video, although much louder than standalone upscalling DVD players... but for those with displays that already have excellent built-in video processors, you wouldn't necessarily want to use a player or the PS3 to upscale your video.
As far as what you might expect out of an upscaling DVD player built into a typical HTIB system... I'd say likely a very poor one.
Just consider for a moment the Panasonic P950 which you can get for about US $400.
It has all of the following components included and or built-in:
- Tuner
- 472 watt Amplifier (104x2/101/34x2/91)
- Audio Processor w/Universal Dock for iPod Playback & Recharging
- Video Processor w/1080p Up-Conversion & HDMI output
- 5-DVD Player/Changer
- 2 Tower Speakers
- 1 Center Speaker
- 2 Surround Speakers
- 1 Wireless Rear Speaker
That's eleven key components, thus the average retail value of each of those as part of the whole package is less than $40. That means it's likely the average wholesale cost of each of those components is less than $20 each.
So any hope of having a decent quality video processor in a HTIB system like this is likely unrealistic. This would also explain why the subwoofer is passive
(has no built-in amp, and also is getting less than 100 watts from the receiver) and is only rated at 45Hz and greater... so if it were me, I'd also be replacing the sub ASAP. The speakers are also very limited in their range, cutting out at 120Hz, and the surrounds are limited to just 34watts each, and all of them have a significantly higher than acceptable total harmonic distortion level.
But then again, you are also only paying an average of less than $40 for each component in this HTIB system, so you have to understand there are going to be significant compromises.
If it were me though, and I was able to return the HTIB or sell it to get my money back, and still wanted to keep my costs way down, I'd buy a decent entry level multi-channel AVR from someone like Onkyo for around $200, maybe less, and spend another $100 on a decent entry level 10" powered sub. Then I'd budget around $100 for each of the three front speakers
(left, center, right) and $50 each for the two surrounds.
With some research, bargaining and compromises, you could put together a system for between $500-$700 that would be a big step up in quality over your typical HTIB.