Best audio setup when using DVI to projector

I am pulling the trigger on a Blu-ray player soon but have a few questions on how best to set it up with existing HT equipment or perhaps just confirm that my current plan is optimal. Any advice would be appreciated!!

Current setup: I have an Infocus 7205 projector which has an HDCP compliant DVI input and I have installed both a single DVI and a single component video cable run to the projector. I have a Denon receiver that does not have HDMI inputs but it puts out great sound and I'm not quite ready to replace it. I only have two content sources, a soon to be replaced DVD player and a Comcast DVR. I currently run component video from my existing standard DVD player directly to the projector and run DVI from the Comcast DVR directly to the projector. I can carry sound from both on either coax or optical cables to the receiver.

Future setup: First, since I don't have two DVI cable runs to the projector and don't want to buy a new receiver just yet, I am assuming that the best option for VIDEO is to simply switch existing cables between the cable box and new blu-ray player. That is, run the converted HDMI/DVI from the new blu-ray player directly to the projector to get HD video (limited to 720P by the projector) and so that upconverted standard DVDs don't get limited by the analog cables, and then use the component video cables to connect the Comcast DVR directly to the projector (I'm assuming that component video cables would take full advantage of the 1080i/720p source from Comcast and the 720p capacity of the projector anyway). Both connections bypass the receiver and should max out the video capability of their sources and my projector. Is this correct?

I'm stuck on the AUDIO side. Having transmitted the video via HDMI/DVI, can I just run my existing optical or coax audio cables from the new blu-ray player to the receiver to handle the sound? If I do this, will the sound quality be limited? If so, is there a better option? Can a blu-ray player send audio via optical while the HDMI Out is being used for video only?

I've read many posts on this but am still a bit confused by the audio options, and whether I need to buy a more expensive blu-ray player that has internal audio decoding. Can anyone explain this and the required set up?

Thanks a ton in advance!

Thanks everyone! That helps a lot.

My DVI and component video are already in place and not going anywhere (installed in a finished ceiling), so it's no big deal to have two runs to the Infocus projector. I've thought about a switcher but until I have a third video source and need the capacity, the only benefit I see is if running 1080i/720p video via DVI would give me a noticably better video image than using component video cables at that resolution. I've swapped out the cables and wasn't able to tell much of difference so I'm thinking that the advantage of DVI might be more theoretical than practical, but it could just be my tired eyes! I also didn't have a great video source to really test it out... just ordinary network tv shows on Comcast. Any opinions on that?

wiskey alpha, I noticed that there is already a pretty healthy debate on the forum about the relative merits of using the 5.1/7.1 analog outputs from BD player vs. using the receiver's processor - a tradeoff that rdclark points out - and also many opinions about the incremental quality of lossless vs. the level of DD/DTS found on blu-ray disks. I don't want to start another debate on the topic, but since you are running both at the same time right now do you personally notice a significant improvement in sound quality using the advanced codecs from your BD51 compared to the optical setup you have on the A30?

Thanks!