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If the DVD, Satellite have component out and the surround receiver has component in then no need to upgrade the devices.
The difference in quality between HDMI and component is negligible and is more dependent on the mix of equipment. Meaning if all your gear has both you may find component yields a better picture than HDMI in your specific configuration.
Blu Ray players can be found all day long for under $100.
Yes, Sony is a PIA with updates but you should not notice.
Mine has updated twice in 3 years.
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