Regarding setting of black levels with display controls versus DVD player controls:
I have a 16X9 RPTV and I wanted it's no-input-signal screen to be as black as possible (i.e. matching the RPTV's black cabinet and the pitch black viewing room) plus blending right in exactly with the deepest blacks in DVD movie black bars when present. (i.e. outer space scenes, etc.)
I found that no matter what I did I couldn't calibrate with ONLY one or the other to get the top-bottom black bars on 2.35:1 AR movies and right-left black bars on 1.33:1 movies to blend right in with the deepest blacks in scenes. I was able to finally achieve this by using BOTH the black level control on my RPTV AND the black level control on my DVD player, in combination, to achieve just the right relationship in black-bar-area versus black-image-area voltage levels. I now can't tell where the black bar boundary is with respect to adjoining black areas in the movie - they blend right in together, as they should IMHO.
So my answer would be to use the controls at both locations if that's what is takes to match up blacks everywhere all the time in the active image area of your display.