lithnights,
Here's another way of saying the same thing...
The data on a CD is encoded digitally. For it to be played on analog speakers, it must be converted from a digital data stream to an analog audio signal at some point.
The question is where do you want it converted from digital to analog and why?
If you send the CD player's digital signal to the receiver/preamp/controller, the receiver's dacs will do the conversion in your system. If you use the CD player's RCA outputs, you are using the CD player's dacs. That's about the size of it.
The only remaining question is which set of dacs (receiver or CD player) do you prefer the sound of? There can potentially be large, noticable differences in the quality of the conversion depending on the dac your component is using to do it.
The most comphrensive way to decide is to listen to both outputs (digital/analog) to determine if you can tell a difference, and if so, which do you prefer.
In this case, if you can't tell a difference, use the CD player's RCA jacks and give the digital to the playstation.