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Its onboard decoding talents are exemplary. Not only does it handle regular formats like MP3, JPEG and DivX 6, but it's equally at home with WMA, AAC, m4a, WAV, WMA Lossless and FLAC - any of which can be streamed over a network. As for movies, the unit supports Dolby Digital and DTS soundtracks, while Dolby Virtual Speaker supposedly creates the illusion of 5.1-channel surround sound from the two speakers and subwoofer by ‘placing' sounds around the room. Dolby Virtual Headphone is also on board in case you want to retain the surround effect when listening privately.
Amplification is handled by the passive subwoofer, which is 20 per cent smaller than the version supplied with the S-301. Power output is rated at 50W per channel for the stereo pair and 100W for the sub, which also benefits from the new Audyssey Bass-XT and Audyssey Dynamic EQ modes, which offers deeper bass response even at low volumes. These are backed up by a wealth of other audio talents, chief among which is Denon's own AL24 processing.
Being a 2.1-system, setup is easy - we had the system up and running in ten minutes. The main unit links to the underside of the sub using a single system connector, while the immaculately built speakers plug into the sub using cables with durable colour-coded plugs. Optional shelf stands (ASF05) and floor stands (ASF07) are available for the speakers.
The top-drawer user-friendliness continues onscreen. Denon has designed an eye-catching new user interface for this system, which is a complete doddle to navigate. All of the functions can be accessed from one ingeniously structured central menu, which lists each media type down the left using charming icons, while the helpful hints at the bottom of the screen make all of the menu options easy to understand. Even integrating the system into a network is straightforward, particularly if you're using a DHCP wireless router as we did.
Heightening the system's ease of use is an unusual but effective remote, which boasts large, well-labelled buttons and a sensibly placed menu control pad. The dedicated subwoofer level controls are a particularly thoughtful touch.
We pulled The Lord of the Rings: The Fellowship of the Ring off the shelf, and right from the start we were entranced by the S-302's picture quality. The early shots of CG armies doing battle with Sauron look majestic and richly cinematic, and the deck's meticulous detail reproduction means that nothing gets lost in the shadows. Similarly, long shots of Rivendell or the spellbinding New Zealand scenery are crisply reproduced, with the Faroudja DCDi chip's slick 1080p upscaling keeping ugly artefacts at bay during the interpolation process.
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