04-22-13: Dcmlover
04-18-13: Sthomas12321
Your B&K's are great for older formats, and if your Sony has analog out, it will be fine for HD formats.
It isnt the best DAC, but with HD audio its not likely to sound terrible. For me, once your at HD audio, its more about dynamics and tonal preference of different brands. Personally I would go with your blu ray player with HD audio over your B&K standard dolby digital DTS. But I love B&K's characteristics over Sonys with what I have owned. If your playing DVD the B&K is the ticket.
There is a point of limited return for your money. HD audio really makes even the cheaper DAC's sound pretty good. The difference in my ps3 fat pcm losless, vs a transport to my Onkyo 866 prepro doing the decoding is extremely small. I'm not a huge Onkyo fan, but thats just tonal preference, it does play clean. So, I think your combo is not your wealk link. I'd go with speakers and projector. I am sound over video btw.
Again, just my opinion.