I would recommend the Sony BDP-S350, it is cheap (I've seen it for ~$200) loads and responds like a standard DVD, is a Profile 2.0 compatible player (you'll need to update firmware and add a memory stick, but they are <$8 nowadays) and has coaxial digital outputs.
I have been a super early adopter of both HD DVD and Blu-ray, and am on my seventh Blu-ray player now and the BDP-S350 is the most usable fastest player I have ever seen or heard of, and the image quality is very good and it will output bitstream for all the new codecs.
I have the Denon DVD-2500BTCI which an awesome unit, but way slower....
I have been a super early adopter of both HD DVD and Blu-ray, and am on my seventh Blu-ray player now and the BDP-S350 is the most usable fastest player I have ever seen or heard of, and the image quality is very good and it will output bitstream for all the new codecs.
I have the Denon DVD-2500BTCI which an awesome unit, but way slower....