I'd bypass the video processing in the 886 with the BDP-83 (it's easier to do than with the 885, and it looks to be covered in Outlaw's setup guide). Personally, I output LPCM over HDMI from the BDP-83 most of the time, but I also bitstreamed a fair bit during beta testing. Both are equally good options. I took the SMS-1 out while getting some work done in the den (painted and had to partially tear down the system), but when I had it in the system I did the SMS-1 setup before running Audyssey. You will need the 886 on to get a signal to the TV, and you will want to have HDMI audio output on the 886 turned off.