Ok, maybe you can consider selling the sunbuck amplifier online or carousell and earn some money back to cover the cost of your new equipments.
Yes, you may need a "Karaoke processor" without an amplifier.
Maybe I will just share some of my opinions of working with karaoke set up and some of the equipments.
DJ Mixer
I think a DJ Mixer is not so appropriate for use in karaoke, as DJ mixers usually are built with only 1 microphone input.
The reason for this microphone input is for the DJ to say things like "Are you ready?, Somebody scream!, Put your hands up in the air!". Sound effects like "echo, room, hall, etc" can be applied to the mic too.
The main use of a DJ mixer is to enable "seamless combination" from one audio input to another input, so there wont be any "silence" in between two songs.
Technically it can still be used for karaoke, as it will still mix the voice from the microphone with the audio input.
But if you are intending to plug in a few microphones and sing karaoke with your family, then the DJ mixer is not an ideal choice.
DJ Mixer (Wired Mic):
http://i.imgur.com/vWR6zhG.jpg
In the pic, the silver thingy with black sliders on top of the box is my old DJ mixer, as you can see it only allows 1 microphone to be plugged in.
Good for occasional announcement making, maybe not so good for family karaoke.
DJ Mixer (Better view, wireless mic):
http://i.imgur.com/dh1pGW7.jpg
The mic input is on the far left column
Normal Mixer
Depending on its size, a mixer will allow you to input more microphones(not limited to mic, can be almost any appropriate analog signal).
Like the DJ Mixer, these mixers also come with an effects processor that can apply effects to the inputs. Though the mixer may not look intuitive, after getting familiar it is quite user friendly.
Pic of a mixer:
http://i.imgur.com/pgmUe3R.jpg
Usually the use of the mixer is to allow mixing of live equipments such as many microphones, guitar, drums, keyboard, etc.
It can still be used for karaoke but it does lack some features such as "key control"
Karaoke Mixer/Processor
If you are only using karaoke at home, I think it would be better if you get these type of karaoke mixer/processor.
Example (not advertisement, for illustration purpose):
http://www.acekaraoke.com/vocopro-d...e-mixer-with-vocal-enhancer.html#.WUfMMlFLepo
This is similar to sunbuck amplifier you bought, except they took out the "power amplifier to drive the speaker" part, and only include the "audio signal processing/microphone mixing" part.
One of the reason why I think you can consider this type of mixer is because they added in the "key control".
This is useful when the singer cannot reach the key of the song, then can use this key control to tune the song to another level up/down so it is easier (i can't sing, my customers feedback this to me before).
Of course if your karaoke software can do key control, then no need to get another external equipment for this job. The "karaoke mixer" may only have effects such as "echo", while the DJ mixer/ mixers have more effects. But i believe for karaoke, "Echo" and "Key control" is enough.
Along with the effects/key control, I believe these type of "karaoke mixer" will be able to output "mic + music" to your AVR, which should be what you are looking for. Maybe you can look along this line.
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These equipments are similar in their working principles, just that they are customised to different purposes. Eg. the sunbuck is a mixing circuit+ mini processing circuit + amplifier circuit.
Maybe a more expensive karaoke amplifier will include more mic inputs +better processor with more effects +more powerful amplifier.
If they take out the power amplifier, then they call it a "Karaoke processor"
For some who like to customise, they can buy many long range wireless microphone and connect to a mixer.
The mixer can allow the input signals to be first sent out to an external standalone vocal processors (eg. karaoke processor, sonic maximiser, expander, etc) through the send/return section, before coming back into the mixer.
Then the signal from the mixer can be sent to an equaliser, then to powerful amplifiers, big speakers, subwoofers.
Some people call it "professional karaoke set up".