A/D/A Conversion in Receivers?

Should I connect my NAD C542 CD player to my NAD T763 receiver using an analog or a digital connection for playback of redbook CDs in stereo? Or should I even bother with a dedicated CD player? In other words, does the superior analog signal from the CD player remain superior once it has gone through the receiver's analog-digital-analog conversions for the sake of bass management? (Because I'm using satellites, I need the subwoofer.) Or should I just use my DVD player as a transport and use the receiver's DACs? I contacted NAD support--who were very helpful and pleasant, by the way--and they said that in stereo mode (with subwoofer chosen in the setup menu), the analog signal coming in from the CD player would remain in the analog domain as it passed through to the left and right speakers, at the same time feeding a crossed-over signal to the subwoofer...thus no extra A/D/A conversion. Can this be correct? If so, how? And if not, would the analog signal from the CD player still possibly sound better even after going through those extra conversions?
Thanks for the help,
Sure, what NAD told you can be correct. Analog crossovers existed long before digital audio ever came along. If that's the way NAD says their receiver works, I'd tend to believe them, absent any other information to the contrary.

More generally, assuming you can balance the sub and sats either way, I seriously doubt there's an sonic difference between doing the D/A conversion in the CD player and the receiver (but you can always compare them yourself). So the choice probably comes down to convenience or features (such as access to signal processing capabilities in the receiver).
Thanks for the response. According to NAD, the DACs, filters, etc. in the C542 are better than in the receiver--plus, I've had experience with how good the C542 can sound in a dedicated 2-ch system. As for NAD's response, the only reason I'm questioning it is because the tech support guy didn't really know the answers to the questions himself and had to keep going back and forth between me and the engineers "in back." Maybe it's just my natural suspicion of all things!
How common is a true analog stereo bypass with bass management in receivers? I'd always thought that receivers and pre-pros tended to sneak the process back into the DSP domain without telling you.