I agree with Chris about connecting the source directly to the receiver for best audio. I experimented this weekend with my cable box (Comcast) going directly to my AVR and then to the TV (Sony EX700) using HDMI vs. my current setup of cable box direct to TV (using HDMI) with TV audio out going to AVR (using optical digital). The TV only outputs two channel audio even though most programming from the cable box has 5.1 audio.
The sound is so much better with the new way!! Because of my experiment I ended up buying an HDMI splitter so my wife can continue to watch TV without the AVR turned on but I can choose better audio when I'm around.
If you ever get an SACD player (e.g. Oppo BDP-83), it can only pass the DSD signal via HDMI (or via vendor proprietary cable) or use analog signals. (It's a copy protection or digital rights issue.) The BDP-83 does not output SACD audio using the coax or optical digital audio connections even for stereo content.
-Dave
