#1 wont work because even though I am turning off the background dvd music, the workout instructions are still on the DVD so I would have no audio from the dvd. The onkyo receiver actually does have a analog overdubbing function, but its one audio source or the other, not both at the same time.
#2 would work, but the tv speakers are pretty poor and I have had problems with getting the tv loud enough to overcome the bike and the fan. The dvd w/the amp is plenty loud enough, but the tv speakers aren't.
I keep thinking some kind of media pc would be my only option?