Originally Posted by batpig
FYI - when using EXT IN there is NO digital processing whatsoever. The signal remains in the analog domain and passes through straight to the amps. So that means no Audyssey, no tone control, no bass management etc. So essentially you have to use the player as the "processor".
AFAIK the receiver still applies delays (distance) and channel level adjustments since those are done after the DAC's (but before the amp stage) but you should confirm this by using a disc with test tones. But you will have to configure bass management (crossover) and other settings in the player.
I took your advice and set up an Outlaw Audio ICBM-1 bass management system between the player and my AVR. All of the speakers are set in the player to LARGE with sub. I ran some channel balance tests with pink noise. I had to make one or two minor adjustments, except for the sub.
The ICBM has some additional adjustments for the LFE channel. One is called LFE Mix control that lets me lower the level of the ".1" signal by up to 10 dB to help counteract boomy bass. This control does not affect the bass content of the other channels. Also, there is a subwoofer level control that lets me fine-tune the balance of my sub with my other speakers. I can boost the sub by up to 9dB, or completely turn it down. During my balancing with the test tones, I set the ICBM's subwoofer level control to 0dB, and used the player's level control to set the level so it was equal to that of the other channels. It appears I may have to use this, or less conveniently, the sub"s volume control, for fine-tuning individual discs, since SACD LFE levels are apparently different from video discs.