Good question I'm not 100% sure myself but I think the dvd player will determind this. I think the first generation toshiba HD A1 allowed for 5.1 direct analog output, but not the HD A2. The newer and more expensive HD XA2 player should as well. As for 7.1, you got me!
No digital cable will carry hi res. audio, that I know. As for the receiver with hdmi 1.3 that would be a major benefit.