equipment change suggestions

This is a little complicated to me, but here goes. The main goal is to not spend too much $, which leads me to believe upgrading my processor may be the best answer.
I have an Infocus X1 projector which only offers standard video and VGA outputs. To get more of an HD video, I bought a VGA to component adaptor to go to my DVD player (the Marantz processor I have, an old AV-550, does not have component inputs). The AV-550 works perfectly, but just seems so outdated as far as hooking anything up to it and getting 1080p or similar.
I'm really OK with sticking to older 5.1 sound, but would like a quality processor (durable) that has a decent compliment of component, hdmi, digital coax, and optilink connection options. I have the Marantz MM9000 5 channel amp, which works great.
So, is the processor the piece that needs to be updated first? If so, what should I start to look for out there in the $200-$400 used range?
The projector is old, but seems to put up a good picture when in HD format.
If you're on a budget, I would visit Best Buy. Some locations even have higher end products in the Magnolia sections. They'll have everything you need there at pretty reasonable prices.
If your processor can receive the five analog inputs from your dvd/cd player, Get the OPPO 103. You'll get decent quality sound and a great hd video by connecting the OPPO directly to your video display via hdmi. I think the OPPO is about $400 new.