Actually, the digital cable isn't pointless -- it'll offload the duty of digital-to-analog conversion onto the 1050, which will probably sound better than using the DVD player's internal DAC.

If I had stereo speakers only (no center, surrounds) and had an analog connection from DVD to 1050, I'd just leave the DVD input on the 1050 set to "Stereo" -- there won't be any digital manipulation at all, which is what you want. I'd do the same thing if I had a digital connection -- the 1050 would decode the signal to the mains. Also, if you tell the 1050 that you don't have a center channel, it will do "phantom center" automatically (I am 99% sure on that, haven't ever tried to prove it and haven't double-checked the manual, but it matches what Scott told you).

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