Thanks for the welcome Adam.
I became terribly impatient and went out and spent money so ended up answering my own question.
For anyone else who this might help in the future though:
TV is an LG 42lg7000.
The surround sound is an all-in-one surround and DVD player, an older Panasonic SA-HT520.
I ended up buying a Philips DVP3980 DVD player that upscales to 1080p.
I'm also in the UK so I have Sky+ (satellite). - This will be replaced with Sky HD asap.
My connections are Sky+ to TV via scart, Philips DVD to TV via HDMI but with analogue sound outputs connected to the old Panasonic.
The Panasonic is now purely used for surround sound purposes and won't be used for future DVD watching.
I also have a Wii connected but that's purely for fun. A PS3 is connected on occasion when watching a blu-ray film until a suitable (and reasonably priced) blu-ray surround system is bought.
I'm happy for now with this setup, not as neat as it could be but ok for now.