We're talking good old-fashioned analog, only not the relatively convenient stereo analog (two signals, left and right) - analog output from a DVD-A, SACD, Dolby Digital, or DTS decoder means six separate analog signals (left, right, center, left surround, right surround, and subwoofer). That spaghetti is one of the reasons that digital output from a source (DVD player, digital or HD cable/satellite receiver, HD over-the-air tuner, game console, ...) is so convenient - coaxial and optical digital cables can carry the un-decoded bitstream for DD and DTS audio to the receiver over a single cable, at which point the bitstream can be decoded, processed (bass management, additional DSP modes, time delay, and what-not), and then converted to analog.

If you run all of your DVD player output (DVD-A, SACD, audio CD, DVD) over analog through the ICBM, you will basically be using the receiver as a volume control and amp. (Bypassing the 2500 and going straight to an amp would present one significant problem: no volume control.) You will not be able to apply any bass management at the receiver (I'm not sure what the 2500 offers, but some receivers such as Outlaw's Model 1070 now offer as much flexibility as the ICBM), nor will you be able to use any DSP modes (including Pro Logic II/IIx, NEO:6, Dolby EX, and DTS ES). Since you don't have surround back speakers and your player applies Pro Logic II to Dolby 2.0 sources automatically, this is not such a significant loss for you. Nonetheless, I'd suggest finding out what the 2500 can do with a digital source as far as bass management goes and compare that to the ICBM - I'd be curious to know whether the system sounds better with the DVD player handling Dolby Digital and DTS decoding and D/A conversion or with the receiver doing it.