I'll add some photos of my system in the next week or two for all to see...
The only two pieces that now remain at the nucleus my system are the McCormack amp and Magnepan speakers.
The recent additions of the ARC preamp and DAC have been wonderful. I now have a remote controlled preamp with a HT pass-thru. This was important to me as I really want to use this one system for HT duty as well without giving up the sonic benefits afforded to me by the equipment already in it. To help make that a reality, I have just purchased a Marantz SR-5001 on clearance that will soon be injected for HT only duties. It should integrate well with the Philips 42" plasma I purchased about a year ago.
The next upgrade will probably be to the amp as I would like to take advantage of the ARC LS-16's balanced outputs (and I'd like to have more power for the MG-12's as well). I'd like to eventually use two mono amps to power the Magnepans, so maybe I'll look for a used ARC or Classe amp that both cover these options, then add a second if I am happy with the sound.
As for now, I will focus my time on hunting down used copies of early issue CD's that are still missing from my collection so that I can rip and convert them to FLAC for use on my music server (Intel P4 running Windows XP, Audiophile 24/96 sound card and AlbumPlayer music management system).
System edited: I finally got around to taking a few photos, I don't proclaim to be a photographer, but I think you will get a good idea of the set-up from these images. I've been very pleased with the integration of home theater into my two-channel set-up, and the best part is, I didn't have to sacrifice the quality of music reproduction to do it. This is largely due to the ARC LS-16. I use the front stereo channel preamp outputs from the Marantz receiver fed to the home theater input of the LS-16. This allows the receiver to control the LS-16 when operating my video sources. The Magnepans stay connected to the McCormack amp and the system is ready to reproduce music as a two-channel entity by simply switching inputs (which is done via the LS-16's remote control). I just installed the in-wall speakers this past weekend. Got a great deal on them from Crutchfield. I'm surprised at how good they sound for the small amount of money I spent for them. They basically provide rear effects for movies, so they serve their purpose. The Marantz does fine in its role, though I would like to have a preamp only processor from Rotel. However, that would take quite a bit more funds and one or two more amps, so this will work for now when viewing the plasma. Next upgrade will probably be to switch to a couple of amps that can be used as mono-blocs. The McCormack amp does a great job, but I would like to have more power for the front channel Magnepans. But for now, I am very happy. Can't believe how good movies actually SOUND through the Maggies! I hope my system will give others sitting on the fence regarding home theater to reconsider their options. This just goes to show, you really can have the best of both worlds!