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I'm not the best one to answer this but I'm sure dvd/cd players do more than just "pass thru" a digital signal to the receiver. It's internal components must have some effect on the sound quality and more expensive players should perform better. Maybe it has to do with things like picking up the...

Ditto what John said. Just up-grading from a Pioneer 563 to a Yamaha 6770 dvd player produced a higher level of picture and sound quality than I expected. Even thru the digital outputs. But picture quality was the biggest improvement.