A reconfigurable audio-video surround sound receiver (AVR) and method provide flexible surround speaker placement and a low cost simulated surround sound implementation. A processing circuit within an audio device or audio/visual (AV) device such as an audio-video receiver (AVR) generates signals for surround and main channel speakers that provide selectable operation between speaker placement in ordinary surround sound installation, or in a simulated surround sound installation with speakers placed at one end of a listening room. An electronic network within the audio device selects between a normal surround sound mode, in which the surround information is provided to surround channel outputs and main channel information is supplied to main channel outputs, or a simulated surround mode in which the main and surround channel outputs receive surround channel information in a phase-controlled relationship, directing the surround information away from a direct path toward the listening area, to diffuse the surround information.