Use the digital out unless you want to invest $ in six cables, and are sure that the DAC's in your DVD player are that much better than your Parasound.
3 responses Add your response
Depends on your gear and your room acoustics and room treatments. I have tried both ways, and for me and my system, the 5.1 rca outputs to the multi channel inputs is the more transparent and lifelike by a large margin. Yes, I did buy some good quality (Straightwire) used interconnects. And I compared this to digital output using a Siltech $300 digital cable.
I use Magnaplaner speakers, a powered Velodyne subwoofer, and the dvd player is the Denon 2200. The 3 channel amp is a Rotel, and the main 2 channel system is McCormack. The Rotel preouts send the signal to the McCormack amp for the large front and right speakers.
Let your ears talk to you!