On pure, 2-channel stereo listening, I notice a very, very distinct shifting in front image between the DIRECT (source + EQ, distance and standing wave) and DIRECT PURE (source... no processing by the AVR). Telling the AVR to shut everything off and just play the source's info unaltered yields a much wider, deeper, more saturated sound stage. On the times I am sitting dead center doing critical listening, this is the way I roll. Every other time I have it set to DIRECT. Under direct, the soundstage collapses slightly and really focuses the center image, to the slight detriment of the width. The tradeoff is that there are indeed some equalization issues when the processing is turned off. It's a compromise in a non-dedicated room, so you just do what you can.
As for subs, no subs, crossovers of subs, etc... my opinion is pretty well known at this point. Rooms vary, equipment varies, sources vary... and people vary. I've been told at times that the sound I like is brutally clinical when it comes to bass, and maybe that's true. All I know is that this is the most effortless and in-control my setup has ever sounded on music, movies, whatever, and attribute a great amount of that to my Sierra's and my Big Black Box (VTF-3).