I have a home theater set up with a Pioneer Elite 45A DVD playes and a Denon 3806 receiver. They are currently connected using a toslink. If I understand correctly what is happening is that the DVD player is sending a digital signal to the receiver and letting the receiver convert it to an analog signal, then sending the analog signal to the speakers. From a pure technical point is it better to let the DVD player convert the signal form digital to analog and send an analog signal to the receiver, or do it as I have it currently set up?

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My roommate and I just bought a nice 65" 1080p TV and need a 5.1 system to go with it. We have a budget of about $1500-$2000. He gets accomodations through his work on Polk and Onkyo, about 50% off on both. So we were thinking along the lines of Polk speakers and an Onkyo receiver. I just have no idea what I'm doing when it comes to power amps/pre-amps. Also, any suggestions on a sub?
I'm new to home audio. I've grown up around live audio and have a recording studio, so I have some idea what I'm doing when it comes to accoustics, but that's about it. Haha.

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anybody ever investigate the effects of the lighting in a listening enviorment? How the level of light, the COLOR temperature of the light has an effect on how you perceive the sound. Lotsa blue in the light(high color temp), or lotsa red (low color temp) effects moods, and perception, at home and work. Why don't it effect what you THINK you hear or don't hear.