"Isn't the case not really using HDMI vs analog, but using the Oppo's DAC converter vs the Onkyo or PS3?...
...i.e. using Analog outputs sounds better with the Oppo because the Oppo SE's higher quality DAC's are being utilized, while if HDMI was used for audio, the lower quality DAC in the Onkyo would be used."
Longhornguy
Oh if it where only that simple! The believe the reality is is that there's more variables to the equation than simply a matter of DAC quality. And if what is being inferred here - that you can simply chose a high end DVD player, and not need an outboard AV processor - where the case, I garantee all the pro's would be using this route to process their movies! After all, the most direct path of lesser components should be a more pure fidelity potential, correct? But I believe, when you're dealing with analog out from a player source, you're dealing with not only DAC quality, but all that's entailed in the preamplification stage, analog output, buffering, impeadance, etc.
I'm not so sure it will work as well this way, bypassing outboard processing for digital dolby and dts, personally. And if it were, we'd all surely be going direct from something like a moded OPPO, analog out, straight to our amplifiers! Sounds reasonable enough, right?
My own experiences over the years has been that processing the dolby and DTS material from DVD sources have always sounded (not to mention the ability of bass mgment, DSP,etc)rather flat and 2 dimmensional, compared to processing in an outboard dedicated av pre or receiver via a digital connection. And, while I've had excellent- even better - results often processing PCM 2 channel sources via the analog outs on DVD players, I've never found one case -at least before the newer HD codecs were introduced- where going straight from any level of DVD player, analog out, direct to an amp, sounded better for digital movie sound! And I've used some ultra high end 2 channel gear and multi-channel setups in my own projects. And believe me, if I could have gotten away with processors, I woulda. But it never worked. That's my experience anyway.
This all, however, should be easy enough to break down. All that's needed is a few questions posted on this to the pro av reviewers out there from various publishings, discussing this very topic. See what they have to input, and make some more assessments on the subject.
I bet you get a different set of conclusions, answers and prospectives from the perspectives being concluded here though.