Even with the work put into Outlaw's manuals, this can get pretty convoluted, so don't sweat it. It sounds like you've got this pretty well in hand already, anyway. I've got a breakdown of the bass management behavior in my 950 review
here , which might help clear some things up, too.
1. You are correct about when the crossovers function (although the stereo bypass mode is a little more complicated than that, but we'll leave that alone for the moment). You've chosen pretty good starting points for your crossovers, but you might also try 100Hz for the center and 80Hz for the surrounds to see how that sounds.
2. Yes, you'll need the coax digital for DVD's and the analog 5.1 for DVD-A/SACD. For CD listening, I'd probably have to try both to see which DAC I prefer, as you are already thinking. The digital output would let you play with PLII and other modes (5 stereo, 7 stereo), with you can't do with the 5.1 analog input.
3. The stereo bypass is similar in principal to the 5.1, but the two are separate systems. The main speakers will see the full range signal, but the likelihood of inflicting damage because of that is slim (especially with mains like yours -- I ran mains that only go a couple of Hz lower for over a year and a half with no sub at all) . As outlined in my review (thanks to lengthy discussion here and elsewhere last year), we know that the mains always get a full-range un-manipulated signal in stereo bypass mode, but if the mains are set to "small" in the speaker setup, the subwoofer also gets the low frequency information below the main speakers' crossover point. The theory is that your speakers will not be able to reproduce much in that area, and the sub will be able to fill in while still preserving the analog pass-through of the main signal. Using the 5.1 input for CD playback, on the other hand, puts you through a different signal path that includes an analog bass management circuit (if it is turned on) with a fixed 80Hz crossover. In your case, if you are using the 2900 as a CD player and want to use stereo bypass, you would need to connect a stereo analog output of the 2900 to a stereo analog input on the 950 -- which would be in addition to the digital coax and the 5.1 analog. I think I'd just use the 5.1 analog input to compare the 2900's DACs to the 950's for CD playback and not worry about stereo bypass for that source.
4. I've seen a little of those debates, but haven't followed them enough to know what the answer is. One of the 2900 gurus around here can probably explain it for us pretty quickly, though.
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