Welcome aboard the HTPC train!!
Well for starters to get the best out of the PC for audio you need to use an outboard Dac or a USB converter.The other option is go wireless.
For movie and basic music playback, the PC's SPDIF out is just fine. You'll probably be happy with it compared to the Yamaha music cast system.
Also you'll be very surprised at how good your PC can do video or DVD playback. I don't know what type of PC you have or the video card. But you need an HDCP compliant video card.
I say this because if you plan to use this PC for Blu ray playback in the future..this is a must.
You can go to Cyberlink and download the Cyberlink BD advisor
. This will check your PC to make sure it has an HDCP compliant video card and also make sure you have the proper memory and processing speeds to handle Blu ray playback.
If it is a fairly new PC, it is probably already setup for this.
I personally have no use for a separate DVD player. The PC does just as well of a job and does it with more features as a whole. Th only draw back is, if your video card doesn't have true HDMI sound and video output. You can't play the HD codecs. It will down convert the format so your SPDIF can handle the signal. You'll still get the Hi Def video from the HDMI connection however.
Stock your PC has a DVI output. This will give you Hi Def picture..just no sound through this connection. You can buy a DVI to HDMI adapter along with an HDMI cable and hook this to your Plasma.
If you do not have a processor that can decode the new HD audio formats..this really isn't a big deal. Remember you'll still get DTS and Dolby digital sound if the BR disc has it out of your PC's SPDIF output.
You can download all sorts of codecs making your PC able to playback movies from any place on earth! No region code problems when using a PC. K lite codecs
is a good place to start. This is something the average stand alone players can't do. You can play DVDs or Blu rays from any region.
In the future you can upgrade the sound card to true HDMI output... once the prices of these video cards come down.
You can install a Blu ray drive for as little as $125.00. This is a lot cheaper than $400 for the average stand alone. It will play your standard DVDs as well.
So far the highest bit video processor I've seen used in stand alone BR players is 10 Bit and 12 bit/ 297 Mhz video processing. That's Denon's 3800 and the Pioneer BDP-51FD.
You have separate video cards you can install yourself that will easily exceed this climbing pass 400 bits in processing power. The average PC video cards more than double the processing speed of the standalone players currently on the market.
So in short...I wouldn't worry about picture quality..you'll be pleased with the proper video card. There's a lot more you can do. These few suggestions are to get you started.
You can increase your audio performance going with a different audio player like J. River media center.
www.Newegg.com or Amazon is a good place to get a Blu Ray drive.