I have 2 HDMI in and 1 HDMI out on the receiver. I always thought it was better to let the tv do the up scaling etc.

I have 1 HDMI plugged into the HDMI out on the receiver going to HDMI in on the TV. I then have HDMI going from the BR player to the TV and Optical to the Optical in on the receiver.

On the BR Player I selected Dolby Digital 5.1 in the Audio setup screen, but it only plyed in 2 ch.

So am I better off to run HDMI from the player to the HDMI In on the receiver? If I do that I do not need to run the optical as well do I? And should I do that for my DVD player and PVR as well?

What setting should I select on the receiver?

Sorry if these seem to be dumb questions but I am a little confused.