James:
You are correct about the great confusion about 5.1, 6.1 and 7.1 speaker placement.
However, I am sorry, but with all due respect, you are incorrect when you state "there is no such thing as SIDE speakers".
Check out this URL:
http://www.audioholics.com/education/audio-formats-technology/thx-select-and-thx-ultra2-certification-general-questions/thx-select-and-thx-ultra2-certification-general-questions-page-2THX 7.1 surrounds are supposed to be placed at 90 degrees to the listening position, not at 110 degrees (which is the only correct position for 5.1 music). A pair of surround 'back' speakers are required as well. They can be placed on the back wall together or slightly apart from one another. Their orientation and placement on the back wall depends on whether they are conventional, dipolar or biplolar.
Both sets of surround speakers ideally should be placed up on the wall, angled slightly down toward the listeners.
The bottom line is that for movies, surround sound diffusion, not precise imaging is paramount (sorry, I couldn't resist the pun).
Quoting Practical-Home-Theater-Guide.com,
"Unlike the front speakers, the job of the surrounds in a home theater is to create a cloud of non-localized sound that envelops the viewer. It is this diffused rear sound field, which actually makes you feel like you are in the middle of the movie action."
Note that both sites show side placement of surrounds for 7.1 movies.
For 5.1 music, 110 degree rear surround is the only correct speaker placement.
Yes, you can put the 7.1 surrounds at 110 degrees and compromise on movie surround placement if music is more important to you. Or you can place the surrounds at the correct side position for movies, but this completely ruins the rear image of 5.1 music.
Why should you have to compromise?
If a CE manufacturer expects a consumer to pay $2000 or more for a preamp/processor, he or she should be able to expect to be provided with the ability to correctly play back multichannel music as well as movie soundtracks. So far, there isn't one CE manufacturer that makes a pre/pro with which one can achieve this simple requirement.
James, Bryston is on the right track with the SP3. I believe that if Bryston implemented and properly marketed this simple feature, you'd blow the market away.
Steven