If you enjoy the LMC-1 then just get a Panny BD-55 as recommended. I doubt very strongly that you would notice any difference in sound quality between using conversion w/in the Panny and using your analog outs vs. using HDMI and letting a new pre/pro do the processing. Remember, the only way a pre/pro goes out of date is if there are new codecs you want to use. But, as in this case, if you have analog inputs then I would see no reason (unless you really want to do HDMI switching w/in your pre/pro, which is a convenience but not really a quality issue) to upgrade. I currently have a Denon AVR-1802 receiver. For my size room the power is certainly ample (80W), I have no need for HDMI switching, and when I get a blu-ray player I'll just get one with analog outs and continue to use the Denon 'til its dead.
