Anyone using the analog inputs from the processor?

I agree with both points of view here.
I have a denon 5900 hooked up to a denon 5803, and have both analog and digital interconnects. The digital connection sounded better because I could manipulate the sound in the avr.
But then I added a cj met1 6-channel, analog, tube pre and was forced to use 6 analog outs to pre and 6 more over to avr. The sound improved based on quality of interconnects and the addition of a quality pre amp.
Now I have added the cj met150 5 channel amp and eliminated the avr all together , and it sounds much better than dvd to avr via digital.
The 5900 is outdated but has quality dacs from what Im told, so that could play a role. and all those interconnects leave room for degradation, but I am very happy with both sound and future expansion using a analog pre and amp, plan on adding a denon blueray with analog out and a transporter for server setup to feed analog out of that as well.
Works for me :)

Should have mentioned I also have a primaluna8 tube cd player, that has only analog outs to the analog linestage, and it sounds incredible.

I guess like most things audio, the outcome depends on many variables. It's expensive to include a quality analog output stage in an audio component, as a result there are many popular DVD players on the market (like Oppo) where a digital connection is the only way to go if you want the best performance. They focus on the digital HDMI performance (very successfully) within a given price target and the analog performance suffers as a result relative to what's possible with analog.

Flrnlamb, I don't disagree with what you've said and if/when I decide to replace my receiver I will probably use digital connections for digital sources, except for my cd player, which has the DCS Ring-DAC built in :-)

The room-correction eq they are building into today's receivers can work wonders in the typical home setup, as you know.

However, I have come across more than one review where they have praised the analog connection route on certain higher-end two-channel systems that pull double-duty as a home cinema system. Specifically, an Arcam FMJ DV29 player feeding decoded 5.1 DD/DTS to their analog C30 preamp (with the optional multichannel module) feeding a giant stack of five (or seven!) Arcam P1 monoblocks.. Strap that system into your typical living room and hold on to your hats! -jz