I've just purchased my Squeezebox classic and i'm in a similar position.
Currently connected to my Sony STR-DG910 amp via Qed rca cables with amp in direct mode.
Connections on amp -
HDMI In/Out: 2/1
Component Video In/Out: 3/1
Audio In/Out: 2/0
AV In/Out: 4/1
Opt. In/Out: 2/0
Coax. In/Out: 1/0
Monitor Out: 1
Subwoofer Pre-out: 1
Front input: AV.
Is my current setup the best for sound quality ? I guess that currently the DAC on the Squeezebox will be doing all the work.
If anyone is familiar with the dac in my Sony amp is it a better DAC ? Hence would it be better to use a coaxial connection from the Squeezebox to the digital in on the amp ?
PS Speakers Wharfedale Diamonds 9.1 on cabinet