Super Confusion...please help

[PPD3195]

I think I've read so much on here that it's all blended together and now I don't know anything!!

I have an Onkyo 805 receiver, running a 7.1 speaker setup, that I plan on pairing with either the S550 or Panasonic DMB55.

I've read the S550 review thread paying note to the issue with 2nd source audio. I do not care about the PIP and BD Live stuff. I just want to get the best possible sound from my system.

So here's where I'm stuck...

First, analog outs or HDMI? I know my Onkyo will decode all the latest audio formats, and I'd like to take advantage of that. Do I bitstream it, or LCPM (is that right?)

I currently use my PS3 for BD playback, and although I think I'm getting the highest audio output, my Onkyo says multichannel.

Anyway, feedback would be very much appreciated.

Thanks!