Historically the discussion of EQ on the SP1.7 has tended to focus exclusively on the notion of "room EQ" i.e. attempting to compensate electronically for acoustic issues in the listening room. James T has, in the past, always come down as very strongly opposed to room EQ, with his most important reason (IIRC) being that a system based on (say) parametric EQ can only improve listening conditions at one particular point in the room, and is just as likely to make the sound
worse at other places in the room.
This is a reasonable objection as far as it goes, but I nonetheless diagree with James' stance

for three very important reasons:
1) It seems to me that the majority of processor customers out there do not agree. They
like room EQ. After they've been exposed to room EQ on another processor they say things like "I can't imagine ever listening to a processor without room EQ again". I think failing to add an EQ system to the SP1.7, even a crude one, could be commercially very damaging. You may regard all these people as misguided, but you can't explain to all of them individually why they're wrong, and it may be necessary to add some kind of EQ system simply to avoid being the only processor on the market that doesn't have one. (See also "THX Certification"

).
2) It is a mistake to think
purely in terms of parametric EQ being used to obtain a flat room curve. There are now a number of room EQ systems in existence which are specifically designed to produce benefits over a wide listening area.
The Tag LcLaren system, TMREQ, is, I think, pretty much just a parametric EQ/flat frequency curve system. Even so, many Tag owners love it.
The system used by Meridian is, again, a parametric EQ system, but the aim is not to flatten the loudness/frequency curve, but to ensure constant
reverberation times at all frequencies up to a couple of hundred Hertz. This is achieved by using very narrow, shallow "notch" filters at frequency response peaks: in essence, it's spoiling the Q of the resonator. One of the stated aims of this system is eliminate room nulls as well as room maxima by preventing standing waves from building up in the first place.
I'm not familiar with the internals of the Lexicon room EQ system, but the simple fact that, to set it up, you use
four microphones spread out around the room rather than just one tells you that it is designed to improve listening across a wide area.
Another interesting-sounding system is MultEQ, a software system made by some people called Audyssey Labs.
Audyssey MultEQ automatically eliminates the frequency response distortions introduced by the acoustical environment and is the only method that optimizes system performance for all listeners in a room simultaneously.
The reason this is interesting is that their software was specifically developed to run on Texas Instruments DSP chips - such as the Aureus chip that the SP1.7 is about to be upgraded to.
3)
There are an awful lot of other things you can use EQ for besides room EQ. For example:
i) You may be able to flatten the output of a loudspeaker. A speaker may produce a constant output to within +/- 2dB across its specified frequency range, but that makes for a difference of 4dB between the loudest and softest points (potentially). Judicious use of EQ could make the speaker output flat - that certainly would benefit all listeners.
ii) Another possiblity is that it could be used to improve tonal matching between not-quite-identical centre/front speakers. In my system, for example, the HTM1 centre is detectably brighter than the 803 fronts. Gentle use of graphical or parametric EQ could improve the match.
iii) It can be used as a less-crude version of the existing bass-limiter if you're listening late at night and you don't want to wake up your neighbours with sub-bass explosions.
iv) The source may be able to (partially) compensate for a weakness in the recording. When watching an old film with a muffled soundtrack on my old TV I used to turn up the treble to make the dialogue clearer - now I don't have that option. (Even if you're not the sort of person who messes with tone controls, you've probably at least occasionally done a visual version of this - adjusted brightness and contrast controls for an old, poor DVD transfer).
v) People like me who have different degrees of hearing loss at different frequencies can boost speech-frequencies to make dialogue more audible without deafening themselves even more when things blow up.
And of course all of these examples are based purely on parametric EQ. Another very important point is that
there are other forms of EQ. Thomaspf, for example, has argued very articulately on several occasions for loudness correction. This is a system that (please correct me if I'm wrong, Thomas!) adjusts the sound spectrum depending on the volume. Any given speaker is designed to sound best at a particular decibel level, and any given film soundtrack is designed to sound correct at a particular playback volume. Turn the volume up or down and it doesn't just sound louder or quieter, it sounds different in other ways too, because of the way the ear/brain system works. Loudness correction ensures that (e.g.) a film mixed to be played back at 85dB still sounds "right" at 75 dB.
And there are many other possiblities too.
All-in-all, I think that some kind of EQ system, even if it
isn't specifically intended to perform room EQ, is necessary rather than merely desirable. I hope other people will agree.