Harmon Kardon AVR 435 - looking for advice set up or upgrading

[jdlivestrong]

Hello - I've been frequenting this site for some time now and finally joined to put up my first post in search of a little help. I've been into HT since about the beginning of DVD's and about 3 months ago jumped into Blu Ray (with the help of this site, I've built my library up to almost 100 now). I've recently picked up a PS3 and upgraded my TV and am looking for a little help on my audio.

Current set up:
TV: Samsung 50" 1080p Plasma (A550)
Blu Ray: 80 GB PS3
HD DVD: Toshiba HD-A3 (picked it up with 50 HD DVD's recently for fun...wish I hadn't)
Receiver: Harmon Kardon AVR 435
Fronts: JBL Northridge E Series E90's
Center: JBL Northridge E Series EC35
Surrounds: JBL Northridge E Series E10's
Subwoofer: KLH 10" 120W (upgrade long overdue)

Since my receiver doesn't have HDMI, I'm running HDMI from the PS3 and HD DVD to my TV and then optical out from my TV to the receiver. I thought that an optical cable could carry all of the new audio signals, but I don't think that is the case...which means I'm missing out on one of the great benefits of Blu Ray.

So, I've been thinking about picking up the Denon 1909...which has also got me thinking about trying to find a deal on some Definitive Technology speakers. But on the other hand, my HK receiver and speakers are only a couple years old (except my sub).

My question...is there a way for me to fully enjoy what Blu Ray has to offer with the equipment that I have?

Thanks in advance for your time!

LIVESTRONG