Dolby Digital and DTS can be decoded at the player or at the receiver. If it's at the player, you use the 5.1 analog output (which can pass through the ICBM) to connect the player to the receiver. If it's at the receiver, you use a digital audio cable (optical or coax) between player and receiver so the receiver can get the raw bitstream.

The benefits of handling the decoding of Dolby Digital and DTS at the receiver instead of the player are typically better bass management at the receiver (which the ICBM can offset nicely), better time delay control (which may or may not be true depending on player and receiver), and additional processing modes (Dolby EX, DTS-ES, Pro Logic II/IIx) if you have a 6.1 or 7.1 speaker setup. Additional concerns include where the better DAC's are (the player has DAC's good enough for DVD-A and SACD, but some receivers and processors do have some really solid DAC's - I prefer my 990's DAC's to my Yamaha S1500's for CD playback), which has the better DSP engine (probably not a huge difference, since in theory bits are bits and the conversion is straightforward), and how transparent the analog bypass of the receiver is with 5.1 inputs.

I tend to recommend keeping the decoding of DD and DTS tracks in the receiver. What bass management does the V2500 offer?