It's time to upgrade.

The comparison between using optical passing the higher bitrate DD/DTS lossy audio vs. the DD/DTS HD audio over HDMI will likely not be noticeable, rather the biggest improvement gained by upgrading to a more current model will be the use of the Auto EQ program on the speakers/sub.

Another (and cheaper) option is to get a blue ray player that re-encodes the Blue ray sound tracks to maximum bit rate DTS (such as a samsung), which can pass to your older AVR via the optical connection.

While not quite as good as an HDMI connection the consensus seems to be that its damned close.

I use this with my Denon 5800.

If that is the only reason you want to upgrade, yes. Also the BDP doesn't rencode the audio, rather AFAIK the higher bitrate DD/DTS audio is already encoded on the BD by default, so yes, the PS3 can play this via the optical audio output.

go for the upgrade. i recently switched a 6 year old onkyo 503 for a new denon 1713 and it is like hearing surround sound again for the first time. it was worth it for audyssey alone, but pandora and airplay support plus less cables make it a slam dunk.

Thanks for posting this, and if you don't mind me piggybacking I'm in the same spot and looking at a possible upgrade.

I have an Outlaw 950 pre and I've been looking at the Marantz AV7005, now heavily discounted. I really like the sound of my 950, but would like to move up to TrueHD (if it matters) and have a more streamlined cable setup with HDMI support. My primary music listening is SACD/CD using analog out and the Outlaw bypass from a Sony DVP-9000ES. I would still keep that unit. As my family has grown the Outlaw has had to accept the audio from an X-box, PS3, and DirecTV HD.

Any thoughts or suggestions?

Not correct about the re-encode, I have tested it. I have 2 Blue ray players, Samsung 5500 and Oppo 93 both connected to my Denon via optical/coaxial. With SOME dolby true HD discs (e.g. LA Confidential) the Oppo gives standard rate Dolby Digial but the Samsung gives re-encoded max bit rate DTS. I raised it with Oppo support and its something to do with the disc having Java. The Samsungs do re-encode the audio to DTS.

^^ Samsungs offer two types of bitstream.

Bitstream Audiophile sends whatever codec is on the disc. When using an S/PDIF connection, the player will send the lossy version of the lossless original - the DTS core from dts-MA tracks and DD 5.1 from TrueHD tracks.

With Bitstream Re-encode, the player will decode whatever track you select and re-encode it as DTS. The Re-encode setting allows you to mix in Secondary Audio when using optical or coax connections. Audiophile only sends the movie soundtrack, which does not include menu sound effects or PIP commentary tracks.

There is no sonic advantage to re-encoding to DTS instead of DD 5.1. Both are done at the maximum DVD bitrates and are indistinguishable.

jdsmoothie was quite correct in his description of how legacy connections are usually handled with lossless originals on Blu-ray. There is no re-encoding done unless the user calls for it on players like Samsungs that offer it as an option. Instead of re-encoding, the player simply sends the lossy core that is part of the dts-MA encode or the hidden DD 5.1 track that is embedded in the TrueHD package.
Edited by BIslander - 1/3/13 at 12:12am