there was a good thread with seawolf among others that I wanted to jump into covering the merits of a Yamaha and Oppo line, but is unfortunately "closed"

The last component I have to upgrade is a 10-yr old Sony 5disc CD/DVD changer with Dolby Digital and dts. Looking for better audio on standard CDs, the latest movie encodings, SACD, as well as BlueRay, and DVD-audio.

Q1: how do the decoders/DAC of the player interact or not become redundant with those on my HK-AVR354? would the fine DAC of the Oppo for example be reprocessed by the AVR? I never quite understood how the interaction between the source and receiver actually works wrt to the conversion from digital to analog--is my current Sony sending a digital signal through the optical cable (no HDMI on this model), bypassing it's own decoder, and the AVR is doing all the decoding to analog?

Q2: I believe SACD requires analog outs to the AVR in order to use only the players DAC, from what I read, do I have this correct? and what then about the other multichannel movie formats like, how does an HDMI or digital connection from player to AVR affect those? What I want is one HDMI connection from player to AVR, but not sure if this negates the processing of an expensive CD-DVD unit.

thanks much for any advice!