denon 4310 or stay with arcam avr 350

I am currently using PS3 going into Arcam avr350 (optical connection). System is 4.1 using SF old version cremona infront and Thiel 1.6 in the back + velodyne. This is an HT only system only.

I am wondering if by swtiching to a Denon 4310, I can use the HD audio format and get better sound. I realize the amp section is inferior to the AVR350 so I would think benefit applies to bluray only. What you think?

My other option is to get a pre/pro like the Integra to drive the amp section of the avr350. I would like get the AVR600 but scared off by numerous problems detailed in avs forum. I am lucky not to have problems with my avr 350.
The 4310 has now been superseded by the 4311 and looks really impressive.