Option 1: use analog outs on the BDP-83. This raises the question of how the 5-channel bypass on the Outlaw 950 compares to that of the 990. Would I see any improvement by upgrading to the 990? I have no need for new features and am only interested in the analog bypass quality.
The analog bypass on the 950 is quite good, and I wouldn't expect to hear any real difference between it and the 990's analog bypass. The bulk of the work is happening at the player in either case.
Option 2: Buy the 990 and use it's DACs. But is there any expectation that the 990 would outperform the BDP-83's analog outputs? It's probably too soon to know the answer to this, but any insight would be appreciated. Initial reviews seem good on the Oppo's audio.
You are still going to need to use the BDP-83's DAC's and multichannel analog output to get the high-res audio formats (TrueHD, DTS-HD, multichannel PCM, DVD-Audio, SACD) because the 990 lacks HDMI input. Pushing digital out of the BDP-83 to the 990 is going to work fine for DVD's and CD's (Dolby Digital, DTS, and PCM stereo work fine over coaxial and optical), but not for the rest. The BDP-83 doesn't have the level of surround processing sophistication of the Model 990 (speaking specifically of features like Pro Logic IIx that can be used in conjunction like basic decoding) - no disc player does - but its analog section is
good - good enough that I think it can hang toe-to-toe with the Onkyo 885 I've been using during beta testing. For additional point of reference, I found the 885 and 990 to be quite closely matched.
The Model 990 offers some nice upgrades from the 950, in my opinion, even if for the specific case of intermediary between a BDP-83 and your ears it may not yield any significant audio benefits. The DSP chip is faster, so signal acquisition times with digital signals are much lower. The analog video transcoding from composite and s-video to component is handy, and the editable input names are something you quickly can classify as "essential." The analog section is also better, so for any digital sources that might be coexisting with the BDP-83 there could be some nice improvements. If your sole interest is how Blu-ray will sound, it would be hard to justify, but the upgrade would offer some other nice changes. It's bigger, though (particularly in height), so you'd need to be sure you had the space in the equipment rack for it.