Long post, many questions

I have a two-channel stereo speaker (plus a subwoofer) setup that is old school high quality, and I have no desire to purchase a AV amp or receiver and the compatible 5.1/7.1 speaker array. My present display is a 37-inch HDMI Sharp Aquos LCD.
I've come to the realization that waiting for the Sony BDP S350/S400 standalone BD player (or similar model) is really not worthwhile to me (as I am not be able to take advantage of the home theater audio bells and whistles I'd be paying extra for). I plan to use a PS3 primarily for playing my 200+ DVD collection + any Blu-Ray discs I will definitely purchase. I will probably try a few PS3 games at some point. I own a high quality standalone SACD disc player, so no need for the SACD option with a PS3 console. All said, it seems the PS3 offers the maximum bang for the bucks (firmware updates via ethernet/Sony support/winning format/growing game titles/etc). Questions are: which Playstation 3 model should I go with? Will I be able to capture some decent down-mixed 2-channel audio through my current setup? What settings are optimal considering my 2-channel setup? Thank you for any advice.