DVD CD player vs seperates

One approach is to get a DVD player that suits what you want in terms of output options and quality for video and pair that with an external DAC for two-channel audio, using the DVD player as just a transport for two-channel. Just as an example, one of the Denon 29xx or 39xx players with a Bel Canto or Benchmark DAC is very popular here. There are dozens of other possible combinations, though.

I use a Lexicon RT10 universal and it replaced my transport DAC combo (Theta) and as a one box solution that can be had used for about exactly what you want I think it is a solid performer............the best? ofcourse not but smooth and solid sound for Red, SACD, and DVD-A....and a fantastic pisture vis Comp video.

I consolidated a Rega Planet and a Pioneer DVD player into an Arcam DV-78 and have been very happy with the results. I can't speak to your specific player but the Arcam is a nice unit and there is plenty of info on the web about it.

The Arcam is close to your price range and is a heckuva CD player!