it kind of surprises me the # of posts that ask for help, but never mention their model #. Your loss, not mine.
Less $200 Onkyo 506 is being had for $199 as refurbed from shoponkyo.
That will get you DD 5.1.
OTOH, the HDMI is pass thru only, and you will never achieve lossless audio. In all honesty, just going by your stated budget, I assume you won't miss it anyways.
red/white out does only 2.0 for you. Unfortunately, the same can be said for optical out from TV. Cheapest way to get DD 5.1 discrete is optical (or dig coax) from player direct to receiver.
So I bought a new PS3 and Sony Bravia HDTV 40W4100
but I still have an old Sony receiver, DVD player, and VCR.
What is the best cable setup to optimize audio?
My receiver doesn't support HDMI, so I have the PS3 using HDMI to the HDTV, then HDTV using red/white audio-out cables to the receiver to external speakers.
Can this configuration support dolby 5.1? (ie: using only 1 pair of red/white RCA cables).
The audio quality isn't particularly good, so what are my best-value options for upgrading? Would an optical cable (from HDTV to receiver) be better? Or can I buy a new receiver for under $200?

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