Whats a sufficient yet affordable 7.1 Surround sound system ?

First - are you sure that your current system does not have an optical in? I only ask because I am surprised that any 3-year old system does not have one (sometimes called Toslink). Anyhow I assume you are right, it just seems odd. There are plenty of really decent brands out there - and to be honest the best way to choose is to listen to them for yourself with some source material you are familiar with. That being said I can give you my preferences. For a mid-range type system I personally like the Denon equipment, with Onkyo and Marantz being of similar quality (in my opinion). For something a little bit cheaper but still very good - Sony makes some excellent systems, as does Pioneer. You might also want to check out Sherwood. Bang for the buck they tend to be hard to beat - but they are hard to find outside of the US (I'm in Canada and have a hard time finding them). Yamaha might be your best bet overall though - some excellent gear and a very good price (probably same price as the Sony but in my opinion better quality gear).

Amazingly the Sony STR-DH700 7.1 is a good sounding and affordable system that I would recomend. I hate to say it but I have an Onkyo 805 and my friend bought the Sony and brought it over and it really does sound ... better in a way... It seems to get loud and crisp sounds. But I do love my Onkyo it has good set ups