Kal, I totally get (and dig) HDMI for movies. But for "music only" not sure?
Why not? Is there some difference in the data on the discs?
IMO HDMI complicates (and severley limits) stereo/audio setup, requiring a good quality HDMI equipped pre/pro, which eliminates 95+% of audiophile gear.
Since I listen, if at all possible, to multichannel music, the equipment is a given. For those still using stereo and analog equipment, you are correct in implying that some changes may be necessary.
Which HDMI based pre/pro (< $1k) or integrated (< $2.5k) would you recommend, for audio only?
AFAIK, there are no audio-only stereo digital processors with HDMI to handle SACD/Blu-ray in that price range. McIntosh and Classe have just introduced stereo analog/digital preamps and, one hopes, there will be less expensive alternatives to follow.
The only options in that range are used multichannel prepros (Integra/Onkyo) or AVRs (many) but only you can decide if using them as all digital except for the output stages will suit you. I have heard of a number of people who have been happy to replace a high-end preamp with one of the new inexpensive pre-pros. I have also heard of many who disdain such.