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Three or four years ago, this might have been more useful (when we had DVD-A and SACD standalone players in the last format war), but today the only time you'll see even a single multichannel analog source connected to an HDMI v1.x receiver will be an existing DVD-A/SACD player. Blu-ray and HD-DVD folks will be using the HDMI connections just as soon as they get the chance, because that is the connection around which the hardware for both formats has been built.
I was hoping otherwise, but I think you're right about this trend gonk. Although the 1070 is well suited for supporting future audio streams decoded externally such as TrueHD or DTS HD MA with its analog bass management capability and excellent signal path through the 7.1 connections, I don't see many of these type of HD DVD/Blu-ray players coming on the scene. In fact the trend in the under $600 players seem to be to provide limited decoding for analog outputs. Even if such players existed for an 'affordable' price it's debatable if the analog path would ever sound as good as the HDMI path...in fact there are a few threads on other forums on this very topic today with the concensus being the HDMI path sounds better. Certainly on my 1070 DD and DTS decoding in the receiver is superior to decoding on my DVD player, although the reverse is true for CDs.

I would definately like to see an upgrade in DACs for two channel audio in the 1070+ or at least in the 970+. In my mind, it's the main weak point in the 1070 since I'm fortunate enough not to be hit by the no-audio bug.

It'll be interesting to see if the Outlaws offer a trade-in on the 1070 for the purchase of Outlaw separates...I think they did something like this for the 1050. I'd certainly entertain moving from the 1070 to a 970+/7075 combination given a $500 or so trade-in. If not, I think I'd opt to keep the 1070 and add a 970+ rather than moving to a new receiver...would it make sense to use the 1070 purely as an amp?

-John