We really need more info to assist
My gut feeling is that Bob is correct, but you don't seem to be working with HDMI for any of your sources, so there's still a chance it could at the very least pass along stereo (which you could turn into matrixed surround) w/ your older Pioneer receiver.
Knowing the actual make/model number of DVD/LD player would help too, along with whether or not you are using a separate Cable or satellite box.
In general, if any of your input components can utilize HDMI, then yes, upgrading to a receiver would improve things. If there's not HDMI, then it won't necessarily make things better having a receiver with HDMI inputs. HDMI means you combine video & audio into one cable, but older receivers/systems like yours do allow you to split up things.
Also, if you could please be more verbose and graph out your current components/connections as follows it makes it a breeze to know your options. Examples:
Sony <model number) DVD/LD player (RGB component out) --> (RGB Component in) LG 47LM6400
"" "" (digital coaxial out) --> (digital coaxial in) Pioneer VSX-D812
LG HDTV (digital optical out) --> (digital optical in) Pioneer VSX ....(etc.)
Did you remember to go into the HDTV settings and turn the built in speakers to 'Off'(?)