TOPIC:

I use a powered Paradigm soundbar to do general TV watching. Audio is fed via toslink from a Pioneer plasma into the soundbar. I've played with the soundbar's settings quite a bit, but it is still less than satisfactory with dialog.

Would a NanoAVR DL help with this? Could it be implemented without an AVR and using a standard digital TV settop box? Any other suggestions for making the dialog more intelligible?

A nanoAVR DL will (in my experience) help with dialog clarity, but the more pressing question is whether it will function at all in that setup. It is HDMI in and HDMI out. In addition, the source must be able to provide multichannel linear PCM. (i.e. not Dolby or DTS).

I suspect you're right. It seems that the new cable boxes offered by my provider support LPCM (sometimes). But there is a lot of variability depending on how individual programs are encoded.

As John already correctly mentioned, that's going to your requirement #1 here. Making sure the source supports PCM out.
DevTeam