I am thinking now about a different idea.   What if I were to link amp/receiver to the Xbox via optical? I could then use second HDMI to DVI cable just for the video.   If I had second digital input on the receiver I could also connect PC sound card via optical.   Does that make sense?

The only issue now I am worried about is the space, these receivers are massive and I have to accommodate it on my desk.   Will something like Asus Xonar U7 work with the Xbox plugged into the monitor that has an audio out? I could then plug it into the external soundcard?

Great. The last question.   My PC monitor has not got the HDMI in, only DVI. So will I get the sound coming from the receiver and then vision on the screen if I use an HDMI to DVI cable coming out from the receiver to the screen?

Thanks. I mainly listen to music on the PC and I am not bothered about 5.1 sound.    Will the receiver pass the HDMI video signal through? You suggested hooking up the Xbox to Yamaha first.   Also, could I get the same set of functions for something about 200$? (HDMI in, optical in)

First of all I would like to say hello to everyone and experess the impression I got from the community. The amount of knowledge and research I was able to read through has beeb outstanding. However, I think my case is quite specific and I feel quite lost in spite of the previous research.   I...