Best way to hook up my blue ray player.

Gear: Sony BD-S300 Blu ray player, Sony 46KLD-XBR7 LCD TV, Rotel RSX-1057 A/V reciever. Currently, I have an HDMI cable running from my DVD player to my TV, and I have a Digital optical cable running from my DVD payer to the receiver. I see some peole are running the HDMI through the A/V reciever then to the TV. Which is the better way to set this up. Thanks
With the caveat that I'm not familiar with your gear (other than the TV), that's exactly how I'd do it. Simply put, this way involves as few components in the chain between the source and what the next component does best: TV gets the straight video feed, and reciever gets the straight audio feed. Full stop.

Yet, there are some other benefits in my view. First of all -- again admitting that I'm not familiar wiht the Rotel -- it's not an unreasonable bet that it's HDMI video switching isn't up to par with a straight feed to the TV. Why bother passing the video through the Rotal at all? I wouldn't. Second, at least in my setup, there are plenty of times when I (or more frequently my wife) just wants to sit down and turn on the TV and watch something (be it cable, a DVD, what have you) without firing up all the additional components to make the whole HT system go. HDMI straight from source to TV gives you the whole shooting match, no extra buttons or nothin' (particularly when you're talking about a handful of non-remote monoblocks that you have to go for a walk to make go in the first place). So, at least for me, it's a no-brainer and how I route all my sources.

Now, if you have a TV with fewer HDMI inputs than you need (which you likley don't) or a video-capable-HDMI-switcher that is up to the task and multiple HDMI sources (which you might), then, by all means, run everything through the receiver. Opinions may vary, and I expect there's no right answer, but that's my two cents.
The only way you can get DolbyTrueHD and DTS HD Master Audio is through HDMI cable as it stated in your Blu-Ray player's manual. The way you have connected right now, you're only limited your Blu-Ray audio out put same as a regular DVD player. Your Receiver does have HDMI out, so the proper way is running a HDMI from your Blu-Ray player to the Receiver. From the Receiver HDMI out to TV. I would turn off the TV's speakers, because you're only needing the Video not Audio from your TV, your Receiver doing the reproduction for sounds, and your TV is just for pictures. You're get the very best of both world.
Well pretty much if your receiver up converts like the new receivers do; you won't lose any pic. quality using that method.--cable box to receiver.
However this way you have to turn on your rec. just to watch the news.
So, If you have some component cables you can do the 3cables for video and the red/white for audio;you'll get a pretty good picture for watching the news on the component input for the tv.
Then if you are watching a movie on cable you can use the HDMI thru the receover and back to the tv on an hdmi input with your receiver. That way you get the best when watching movies.
I have the Elite Kuros and Elite receiver & Elite Bluray player. As a purist, I was somewhat hesitent with passing my video (via HDMI) through the receiver. I have seen no video degradaton from feeding streight to plasma or through receiver so am going through the receiver. It allows me the source switching convenience (Directv HD DVR; XBox and line scaler for SD TV) as well as allows the bluray codecs (albeit I understand the codecs can pass through the analogue outputs of my bluray player). Very simple and no loss in pic quality. And my wife can play a dvd while I am at work-so double cool for moi.
Cerrot and I have the same setup and to confirm his observations I found no difference in direct connections while the system approach (though the receiver) gains all the Pioneer conveniences and operational simplicity.

Cerrot, My wife and I just spent a few hours in front of a Samsung flagship LED display which was very nice. I even found a comparatively priced Elite monitor for this friend but his wife insisted on the thin LED. My wife and I both noticed a substantial lack of detail in this LED which was confirmed upon returning home. We love our plasma.
Let's not call the Sony BD-S300 Blu ray player a DVD player. It's a Blu-Ray disc player that also happens to play DVDs.