The amp might be worth the extra if you listen at high volumes, sit a fair distance from the speakers, or have quite demanding speakers. As for the DVD player, it should be a case of better video quality. Assuming you've got the receiver hooked-up to decode audio CD and DD/DTS, then the DVD player shouldn't really affect sound quality.
Practically any decent amplifier will give low very low distortion at most volumes. One feature that seems to be worth getting is room equalisation. I'd examine some reviews for DVD players and amps.
www.homecinemachoice.com is a good site, but is UK based.
Paying less for an amp means that you can't play music/DVD's at very high volumes without distortion. For most people 40 watts would probably be sufficient, but 100 watts is better. As for DVD players, you probably loose some picture quality. How noticeable this will be will depend on how big your TV is. You should also note that a considerable number of DVD's are not produced to very high picture quality. You can read more about this at
www.dvdscan.com, which is a site run by a company involved in DVD production. So getting a worse picture may not necessarily be due to your equipment.