You can buy it online for less, but I would get the Onkyo over the Sony. While Sony makes some decent stuff, their receivers tend not to match up in quality for the money you spent and the Onkyo would likely be a better purchase. Still, at the price you are talking about, it doesn't really make a huge amount of difference in things. It's all pretty entry level.
Yes, in your previous statement, there is no reason why not to use multiple cables. The biggest advantage of upconversion is that it allows you to connect just ONE cable to your TV and be done with it. (HDMI) So, you put your TV on the HDMI (or in your case, DVI) input, and then all you ever have to do is turn the TV on and off. When you switch to a different input, like Wii, you don't have to change your TV's input, just the receiver's. So, one less input to deal with means it makes it all work a bit easier.
