Just a little update on this topic. I found this thread on the avs forum discussing the yamaha RX-1700 and 2700 and a few posters were saying that they prefered the sound of analog inputs from their DVD player to digital inputs.http://www.avsforum.com/avs-vb/showthread.php?t=713397&page=30&pp=30
Since the digital input source didn't matter(HDMI/spdif etc), the issue really came down to which DAC they liked better.
So basically I'd say DAC choice is the real issue, more so than spdif/jitter etc. The bottom line is DAC choice is subjective and different DAC's have comeletely different sound signatures. So test out all your components and decide which has the better sounding DAC and then take analog outs from there.