I didnt miss any point as the OP was talking about the picture and nothing more. Besides you could still go straight to monitor for video and use multi channel RCA connections if player has internal decoder for advanaced audio.........like I said, no point was missed just trying to keep it "to the point".
The answer involves more than video. HDMI is the preferred method for SACD, DVDA, DTS-HD, and all other formats if it can be used. Some processors actually improve the video depending on the source and the ability of the processor.
you can only pass DD and DTS via coaxial or optical, all the uncompressed formats DO NOT GO over these connectors. They have to pass over HDMI or via 7.1 analog connectors. If you are running your gear this way you have never heard DTS HD Master Audio or Dolby TrueHD.
You are right. I was getting confused with 2 channel PCM which does go over the optical or coax. I run two channel HT so I just use coax to transmit decoded PCM from my player to my Wadia although to hear DTS HD MA I'll have to upgrade my player at some point.
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