Philojet,
The Apple implementation of the Netflix streaming supports 5.1 audio and their video implementation is among the best that's out there. There was a podcast last year on one of the TWIT networks with Leo Laporte's This Week in Tech that I believe covered them and the consensus was that the AppleTV was at the top or slightly behind VUDU in streaming. That was prior to the 1080p implementation of the AppleTV. I have a choice between the two devices and I always prefer the AppleTV. Is it DVD quality? Yes, it better than DVD or equal to DVD. If it's an HD stream, which most now tend to be, then the picture is even better.
In my simple opinion, if you don't care about doing full blown surround sound, then just grab the HDMI off your TV. I think that the NAD is a simple stereo receiver, so I would opt to just go directly to the TV with HDMI.
There is indeed another option and that is to get an HDMI switch that will decode audio into RCA stereo. That may be your best bet. You can pickup this Monoprice HDMI switch and it will do the trick perfectly for you. You can then feed the analog audio directly to your NAD.
http://www.monoprice.com/products/product.asp?c_id=101&cp_id=10110&cs_id=1011002&p_id=7112&seq=1&format=1#largeimage
Good luck.
Theo
