Alright guys. After a few days of debate this is the (somewhat) budget setup I'm going with:
Samsung HL-T5075S TV. Has optical out.
Denon AVR-587. 2 optical in, 2 digital coax in.
Aperion 422-LR Bookshelf speakers.
Dayton 12" powered subwoofer.

I need to order wiring (monoprice) so I'd appreciate it if someone would double check my logic here.

TV connections:
Cable in
Optical out to receiver
Component out from receiver (HDtv)

DVD Player:
Component Out to receiver
Coax (Digital) out to receiver

NES:
Audio & Video out to receiver

Receiver:
TV & DVD & NES audio in
TV video out
DVD & NES video in



So, basically my receiver will have 2 video outputs: DVD & NES.
It will have 3 audio inputs: TV, DVD, NES

Receiver sends video to TV so that I can watch movies & NES.

So, I'm going to need the following cables:
(2) Component (R/G/B) video cables
(1) Optical cable
(1) Digital Coax
(1) Regular ol' composite RCA for the Nintendo
(and of course some speaker wire)

Is this right? Can the receiver take care of the video to the TV, allowing me to not have to tie a video cable from DVD & NES to the tv?