Well...hopefully this helps you out.
1a) The DVD that is doing the decoding should also have a menu for seting up your speakers. If you set the speakers to small, and set the corssover point in the DVD players menu...it should filter the lower frequencies to the sub. (Current Setup)
1b) The Outlaw 1050 has an adjustable crossover built into it. This would allow you to send the digital output signal from the DVD (optical or coax) to the digital input (optical or coax) on the 1050. This would allow the 1050 to do all of the processing and filtering as aposed to using the DVD player. (Setup with 1050)
2) Sub trim can be adjusted on the 1050. I think the range is (-15db to +10db)? Not 100% sure on this one. This would alloow some flexibility in adjusting the sub level, however, once the level has been set on the sub's plate amp...you should not need to make too many more adjustments to the sub levels. The sub trim on the 1050 allows for minor adjustments to be made.
3) The 1050 has two optical inputs and one coax input.
Well, I hope you find this information helpful. If you have any other questions feel free to ask.
-BL
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TWFTPQ