Finally purchasing Blu-ray player! BDP-S360, what to expect? (N00bie.):P

Hey, just finally decided on purchasing the Sony BDP-S360. It'll be my newest piece of equipment for my cheap HT so far since I make gradual upgrades. What's this thing about external memory? Is it through the USB port to a USB device? I'll only be using component as video to my Sony STR-DE598 6.1 receiver which doesn't have the lossy and lossless audio support. I figure that'll be the next item to upgrade, the receiver.
Perhapsa receiver which has at the most 5 component ins, a few HDMI (my TV is just a 25" 4:3 Daewoo flatscreen with component, it's what would fit in the room and my budget when I bought it.), full 7.1 with support for all the current HD disc audio codecs. My current receiver only supports whatever the specifications list online. I don't really mind at the moment.
So for sound, would it be a better idea to feed it into the reciever via digital coaxial audio or just analog it? I have a component switcher since the receiver hasn't enough component ins. My Comcast DVR box and Oppo multi-region player are being run through the switcher and then to the receiver. My XBOX 360, which got the E 74 error (I don't even have a printer to print out the mailing slip thing), is directly run to the receiver via the component/digital optical audio inputs. So as I'm stating, should I just run the cables of the Blu-ray player, when I receive it of course, through the switcher? I know it'll be the component through the switcher but I'm debating running the audio through the analog inputs on the receiver. Would I have better audio through the digital coaxial cable or through the analog?

Okay it's shipping via UPS Ground. Can anyone give me suggestions for what I described above?

Alright.


Would it matter what size the USB drive would be to store BD-Live content or is there a limit? I'd also have the ethernet port jacked in with a LAN cable of course for firmware updates.
There's also support for something called AVCHD. I'm assuming that'd just be for HD broadcasts/showings from online made for customised discs which the Blu-ray player can then play. I'll look it up on Wikipedia too.
It was also a really good idea to get several titles first before purchasing the player. Especially since I've been checking my collection, DVDCompare.net and dozens of other comparison sites for the Blu-ray counterparts while selling the same titles on DVD.
Few titles of which I'm already considering to import since they're Region 0 are:
Les Visiteurs (Amazon.fr possibly?)
ZULU (Amazon.co.uk)
BATMAN RETURNS  (Same as above)


And some others.

How about firmware updates? In the .pdf manual it said 1GB and up is fine so I ordered a 4GB flash drive. It also seems it'll save the firmware updates to it too. Glad I'm reading the manual via .pdf so I can get an idea how to go about things before perusing the actual printed one more thoroughly.
Seems like I made a great investment! Now, since I also have a 360, which needs to be sent in to repaired, which also uses the LAN cable, would it matter if I switched it between the two? More-so since I'd be using one or the other at a time.
Thanks for the help gents!

Wait, so the firmware updates are saved to an interior HD behind the ethernet port housing or something?
I own the HDDVD of TRANSFORMERS and it had some really great downloadable content such as the online robot stuff. Not making much sense since I should go back to sleep.
Now I'm officially purple.
Of course if a title is on both Blu-ray AND HDDVD, whichever isn't encoded in MPEG2, has slightly better audio (DD Plus compared to low resolution audio), BD-50 compared to HD-30. But alot are just titles I'll still keep on HDDVD even when I purchase the Blu-ray. I know I might be known for making lists but I'm actually too tired to go about making one right now. Alot of the prices for HDDVD are very reasonable right now too but I don't mind owning both formats. Speaking of prices, that's one of the main reasons for me to bargain hunt, especially online.
I'll post more later.