Given the lip-sync issues some folks are having, just want to report no problems with an older receiver (Onkyo TX-DS575X, 5.1, DTS and DD, no HDMI), and older TV (Samsung HLP 5674 DLP, 1080i capable, 720p native).
BD35 hooked to Monoprice 4X1 Enhanced 1.3b Certified HDMI Switch (REV.3.0), and then to TV via HDMI. Audio hooked up to receiver with optical toslink set to bitstream. Just used the "easy settings" last night to get it going.
Watched a standard DVD (Pursuit of Happyness), TV and receiver sounds were completely matched, no delay at all. Receiver decodes to Dolby Digital. So far so good.
Monoprice HDMI switch was $30, saved me from having to buy a new receiver to switch between the BD35 and the HD DVR. Of course, that's not necessarily a good thing, especially if you really want a new receiver.