Circle surround is yet another flavor of multichannel sound like ProLogic or ProLogic too. To my ears it sounded better than PLII and to others as well. Of course this is all subjective.
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what would you recomend (from a purely functional viewpoint, not counting space in).... using the sonic leveling, or an external EQ?
I've never compared both since I don't own an external EQ. However, I do like being able to control everything at the LCD.
Cheers,