Originally Posted by SiM
No... I mean:
stereo source -> 3.5mm/phono output on sound card -> phono input on amp -> PL2
and at the
same time
multichannel source -> optical -> amp -> sweet sound with one less set of analogue cables in the chain

So less cables, better quality?
Not sure what you mean by less cables changing the quality? If you mean by using digital over analogue then yep, thats the idea
As for the first one, that purely depends on if you want the soundcard to upmix it or the amp. Thats just preference. I set my creative card to simply mirror the front and back when listening to any 2 channel content
Originally Posted by SiM
Do amps/receivers do stereo -> 5.1 better than sound cards? I would have thought so. They cost more and there are loads of people who may purchase a receiver to play back stereo through a CD player...
It depends on what exactly you're doing with the audio and a large amount of personal preference.
For example, on a soundcard you can so all the fancy EAX stuff should that float your boat. Then there is the more advanced stuff such as stripping out the vocals in realtime.
The other point to consider is how exactly you want the audio to be up mixed. As mentioned, I simply mirror front and back, but you can get more advanced than this by looking at the individual frequencies within the audio and separating these into difference channels to create more of a surround sound effect. This is essentially what Pro Logic does.
As for which does what better? Its all largely BS IMO

We have soundcards which have more processing power on them than my first 5 computers combined, and amps that have more technologies like Pro-Logic than any human can probably remember.
Hook it up, see which sounds best to you with some high quality content (Just grab a DVD with a DTS (preferably) or a DD soundtrack on it) and see which you feel sounds the best. Job done
Originally Posted by SiM
My denon amp can switch between optical and phono automatically (I had to set it up to do this)... Sky goes through phono, when I switch PS2 on it automatically switches to optical

Knew there had to be some