Should I upgrade home theatre to one with HDMI?

You can use optical or coaxial from a BD or DVD player but as has been noted, you will not have the newer higher resolution audio formats not present in your Denon. I have had a similar dilema, running HDMI to my plasma, but making compromises with older legacy codecs via optical connection or multichannel analog. If you use analog out from the player, you need the multichannel analog inputs on your prepro/receiver. You also rely on the bass management of the player unless you have some type of analog bass management device, like the older Outlaw ICBM. I have done this with an Integra Research 7.1, but it's a cable jungle from the BD player to the ICBM and then to the IR. I also have dual subs with unequal distance from listening area. I have decided to upgrade my prepro, simplify my cabling, and get a unit (Marantz AV8801) with Audyssey XT32 and ability to calibrate for dual subs. You could stay pat and still have pleasurable listening, and I have been doing that for some time now. I watched The Dark Knight Rises last night on my current legacy system and the audio was great. You also have choices of many full featured, high quality performing units available now. Good luck.

Thanks for the response guys. All helpful. Happy New Year

Not to pile on, but my Rotel 1056 receiver has me in the same boat, no HDMI inputs/outputs.

I've done what others have suggested and used it for some time now.

TV-Directv box hdmi to tv, tv volume set to zero. Digital audio out of Directv box to receiver.

DVD-Oppo 95 hdmi to tv, 5.1 analog direct to receiver which lets the Oppo deal with the new codecs and the receiver sends the signal unmolested to the amp section.

CD-Oppo 95 2-channel analog out to cd analog input on the receiver. Lets the nice DACs in the Oppo handle the signal.

Hope that helps.

Just wanted to emphasize a point of clarification for anyone not completely up to speed on this format and connection stuff.. ....
Any of the TV, Cable, Fios or Sat boxes will not use the high resolution uncompressed audio that you hear about. (They cleverly make little mention of these specs in the cable marketing and high res audio won't be happening anytime soon) So, the hdmi cable input avail is just an issue of wiring convenience for audio (and a flim flam excuse to sell you new gear) .... The old fashion fiber or coax cable is all you need for Dolby digital 5.1 TV as many of the posters recommend.

Now.... the high res audio formats on Blue Ray discs are fantastic sounding and a good reason to spin discs and hook up the gear with hdmi or 7 channels of analog cables (pick your favorite Dac/pre amp and room management technique configuration)

Admnranger have you chosen the DACS of the Oppo over the Room management and DACS of your Rotel by ear?

"Admnranger have you chosen the DACS of the Oppo over the Room management and DACS of your Rotel by ear?"

No I have not. My Rotel doesn't handle the new codecs on the blu-rays so I let the Oppo do the heavy lifting.

For cd's, I let the Sabre chipset in the Oppo again do all the work. I can't image that the 2005? era DACs in the Rotel receiver are going to trump the ones in the BDP-95 Oppo, but I could be wrong. Are you suggesting that they are better or will sound better with my setup, Tcatman?

I let the Rotel handle the processing for the ipod output coming out of my Wadia i170 and the DirecTV HD DVR. Otherwise, the Oppo does the DAC work for me.