This is the first component I've encountered that's equipped with both THX Loudness Plus and Audyssey's Dynamic EQ, two audio DSP options that address the same issue but with quite different spice packages. (It's funny that Onkyo would opt to include both; they can't be engaged simultaneously.)

The idea with both Loudness Plus and Dynamic EQ is to compensate for the perceptual changes we experience when listening to music, movies, or anything else at a volume significantly lower than that of the original recorded sounds. "Original" is a loaded phrase here (just how loud is a Wookiee's roar, anyway?), so we generally use "mastering level" - what the producers heard in the studio control room or film-sound dubbing stage - as an equivalent reference point.

In any case, most everyone has noticed that when you play an action movie at a comfortable 11 p.m. apartment-complex level, much of the bass content wilts and (less obvious to most listeners) much of the surround envelopment and spatial excitement fades or disappears. The familiar Loudness buttons found on amps and receivers for decades are there to address the first issue, but these can only deliver a single, fixed level of correction for a single, arbitrary volume setting.

By using DSP, both THX and Audyssey can go worlds further. Each uses "smart" compensations that correct proportionately for subjective bass loss at any level below "reference," and do so in convincing (and necessarily far more complex) ways. But that's just the start, since Dynamic EQ and Loudness Plus can also make surround effects and ambience subjectively sound more like they do at reference level, though at lower volume settings. They do this by working dynamically on all 5, 6, or 7 main channels in a soundtrack, adjusting relative channel levels and equalizations as their algorithms react to the program content.

It's a slippery slope, but one worth scaling. While both systems worked well, Audyssey's Dynamic EQ proved more effective at very low volume settings, and produced a more aggressive (and more dynamically responsive) ambience-protection program. But I should also point out that since Audyssey also performs setup calibration, it knows where the in-room reference level actually is - a potentially important advantage to its more adaptive system.

The swept-through-the-sewers sequence early in Ratatouille alternates between swirling, roaring, rushing waters and quiet, eerie ambience with occasional drips. At a master volume 25 dB below THX-reference (a quiet but perfectly plausible late-night "baby's asleep" level), the soundtrack essentially collapsed into barely distinct mono without compensation. But with Dynamic EQ engaged, a good degree of ambience was restored, with the more prominent water effects regaining much of their body and (pardon!) depth. Considering the drastic reduction in loudness, the net result correlated surprisingly well with reference-level "feel."

ERGONOMICS

Along with its full panoply of THX modes and enhancements, the SR706 boasts XM/Sirius readiness, powered-second-zone (or front-biamp) configurability, and iPod readiness with Onkyo's optional accessory dock. Yet, I found it quite simple and pleasant to use overall. The remote is a more compact design that's easier to use than the one it replaces - though a bit less able, due to a smaller layout and about a dozen fewer keys.

BOTTOM LINE

Onkyo's latest receiver is a value monster. You can buy more power, a few more features, and more high-end sizzle by shooting more dollars higher up Onkyo's receiver line (or that of one of its competitors). But the TX-SR706 appears ideally placed, smack astride the point of diminishing returns. If you can find a better $899 A/V receiver, buy it.