Typical audiophile answer-as I said, I've been using it that way for months (after trying running the audio directly to the surround sound system, neither I nor my friends could tell a bit of difference). Sure, it may be the fact that I'm using a low-end receiver-very likely is, in fact, but given hulkster's current budget concerns, I doubt he's in any different position than I am.
And what do you suggest doing in the case of using HDMI inputs? Since my DVD player uses HDMI and my cable is direct coax (and will be HDMI once my satellite gets installed in a couple of weeks), I'm curious.