There seems to be a broad consensus of opinion here. Many of the regulars have spoken up and they all say its probably a mistake to try to do without an AV receiver. See the posts from Seth=L and jcPanny for some good reasons. No one agrees on all the points, but every one does say get a receiver. Put me in that camp as well. An AV receiver will ultimately make things simpler for you, not more complicated.
You have asked a number of intelligent questions that deserve answers. I'll try.
Are outputs (from the Oppo DVD player) for DTS different than decoding DTS?
Yes. Most, if not all, DVD players can send digital signals from CDs (linear PCM) and DVDs (usually either Dolby Digital or DTS, or both). This is done by a single coaxial cable or a fiber optic cable from the DVD player to the AV receiver. The decoder on the receiver recognizes the type of digital signal and selects the correct decoding. If you use the decoder in your Oppo DVD player, and then send out 5.1 channels of decoded analog audio, you can decode all of the common formats except DTS. Unlike Seth=L, I think DTS is noticeably cleaner sounding than Dolby Digital. Your experience may vary..., but I think DTS decoding should not be left out, but, in truth, it is not a show stopper if you don't have it.
Are there good decoders and bad ones?
Probably not, at least not in my experience. I was once told that these decoding chips cost receiver manufacturers all of 15¢. There are some people that do believe in getting so-called high quality decoding chips, but I have never seen any comparison of these chips that shows any difference among them, much less a difference worth paying for. Every AV receiver I know of can do both Dolby Digital and DTS.
AV receivers do a number of things that make them quite different from typical stereo receivers. They are not simply stereo receivers with more channels. Most of these functions were not readily obvious to me several years ago when I first made the switch, at least not until I had been using my AV receiver for more than a month. I suspect that many others had a similar experience with their first AV receiver.
AV receivers process the audio signals from a source in the digital mode. If the source is analog, such as FM radio, a turntable, or analog outputs from a CD or DVD player, the very first thing the AV receiver does is digitize the signal. (There are some AV receivers that allow you to skip digitization, but they are not common.) If the digital signal from a DVD player is sent directly to the AV receiver, this is not needed.
In addition to decoding DD or DTS signals, the receiver handles volume, tone controls, routing the bass to a subwoofer, and the balance between different channels - all while the signal is digital. Doing this digitally allows many more functions to be included that no stereo receiver or preamp I know of has. And all this can be done without the expense of hard-wired controls for analog signals. The very last step before sending the audio signal to the amplifier section, is where the digital audio signal is converted to analog.
There are more than a few other functions done to the digital audio signals (some that vary depending on the make and model of the AVR) that are not obvious to someone who has not become familiar with using an AV reciever. It is hard for me to describe these to you, but these are some of the many reasons why you should not try to do without an AV receiver.
You mentioned getting, in the future, a LG BH100 'super blu' DVD player. Be aware that there is a format war going on between the Blu Ray players and the HD-DVD players. I'd wait until this is settled, and until the prices come down below $200 before getting one of these. I think your priorities should be:
An AV reciever
A HDTV tuner (it will also provide Dolby digital encoded audio, requiring an AV reciever to read it)
A blue ray or HD-DVD player
and finally, when you are good and ready, speakers in this order: center channel, subwoofer, surround channels.
