I thought I saw on the Denon site that this receiver only passes video via HDMI, and I was wondering how next generation disc players would work with this. I didn't think toslink could handle the bandwidth for the audio under Dolby TrueHD or DTS Master Audio. I know the receiver won't decode either, but isn't there an option to pass PCM over HDMI?
There is the option to pass high resolution multichannel PCM. You are right in your assumption that toslink (which works in the SPDIF protocol, thanks to Mtrycrafts.

) does not have the bandwidth of those formats, even stripped down the lossless PCM.
If I ever set budget to spend over $200 on a new receiver, I wouldn't get a receiver that couldn't support audio over HDMI. Unfortunately one has to spend around at least $400 minimum to get that feature (at least in new receivers, refurbs would obviously be cheaper or last years models).
I would compare this Denon to the Onkyo TX-SR575 in terms of performance and features, they are the most directly related.