Between those two my vote would be for the HT S3500 (or something more robust/full featured). You would likely gain all the necessary connections & features if you obtain the right AV receiver for your needs. Plus, if a built-in blu ray player craps out on on one of the 'All in One' units, you have to go w/o the whole unit functionality. Separates lets you get the right blu ray player, and upgrading if desired down the road/ability to swap with another room/tv. The price is low enough now where you could budget/wait a month or two to get your blu ray player to add to the system.

My only question is, on this entry level Onkyo, does it allow you to connect analog devices and still pass along the signal via a single HDMI cable(?) Some reviews have stated that this model does not. Some folks don't care for having several video connections from each input component to their HDTV, so that may be a factor with you possibly. YMMV.

Feel free to come back with more questions.