I just upgraded my receiver to Onkyo TX-SR875 and added Sony Playstation 3. I use PS3 as bluray player though. I'm very satisfied with TX-SR875 HQV Reon-VX Video Processing, it makes ordinary DVD looks stunning. Reon-VX can upscale 480i/480p/720p video from composite, s-video, and component input signal to 1080p video output via HDMI.
Here the list of my equipments:
AUDIO VIDEO
Sony DVP NS575P, Sony Playstation 3 40GB, Onkyo TX-SR875, Sony Bravia KLV-46V200A, B&W Nautilus 804, B&W Nautilus HTM-2, B&W DM601 S2, REL Acoustic Storm III
HTPC/Vista Media Center
C2D E8400 | Freezer 7 Pro, Gigabyte EP35-DS3P, 4x1GB Corsair CM2X-6400C5, Zotac 9600GT 512MB AMP Edition, Hauppage PVR-150MCE, Seagate 320GB, WD Caviar GP 1.0TB, Pioneer DVR-A12XLB, SilverStone ST50F, SilverStone LC20B-M
Here are the controllers, I'm still using Marantz RC-2000MKII Universal Remote, waiting for Logitech to release Harmony One MKII or Two (I wish) which will support bluetooth.

I began to think that I need PS3 remote, it's annoying using gamepad to control bluray operation.
I know the side surround and back surround speaker placement are not ideal, but this is livingroom, there are "other" factors need to be compromised.
I use HDMI for connecting HTPC and PS3 to receiver, and the receiver to LCD TV. I cannot hide cables, so I tried to arrange them as neat as possible. It doesn't look terrible, does it? Oh... cabling cabling cabling, make me sick!
The problem now, is that PowerDVD 8 Ultra, cannot sent bitstream signal through HDMI. If I selected "use S/PDIF" from PDVD 8 sound configuration, there is no sound at all. I had to select just 2 speakers in order to hear the sound. There is no problem when playing DVD using Vista Media Center. So I think this is PDVD 8 bugs, or something? Anybody experience the same problem?
Regards,
LimLim