Ooops, I didn't address your last question regarding optical, coax and RCA. I'm assuming you're talking about audio only here. The optical and coax inputs are for audio and video sources that themselves have digital outputs, such as your DVD player and DirecTV receiver. Does the PSX2 have one also?
The optical and coax inputs on your Denon mean that it has an internal digital to analogue converter that will take the digital audio signal from your source and convert it for Dolby Digital or DTS playback. There are many people who favor using the optical [Toslink], but I happen to be one of those that like to use the coax with RCA termination. With either of these methods you only need to run one audio cable from your source to the Denon. The other method, and I don't favor this, is to utilize the internal D/A converter in the source and run multiple RCAs to the Denon, meaning the output from the source will have already been converted and will be analogue in nature before it gets to the Denon.
I hope this helps. I'm sure others will add to this discussion.
The optical and coax inputs on your Denon mean that it has an internal digital to analogue converter that will take the digital audio signal from your source and convert it for Dolby Digital or DTS playback. There are many people who favor using the optical [Toslink], but I happen to be one of those that like to use the coax with RCA termination. With either of these methods you only need to run one audio cable from your source to the Denon. The other method, and I don't favor this, is to utilize the internal D/A converter in the source and run multiple RCAs to the Denon, meaning the output from the source will have already been converted and will be analogue in nature before it gets to the Denon.
I hope this helps. I'm sure others will add to this discussion.

