The Benchmark has three digital inputs:
1. Optical TOSlink
2. Coax (BNC w/RCA style adapter included)
3. XLR
You can switch between them via a 3-position switch on the front panel. Like a digital pre-amp, of sorts.
These will take a PCM feed from any compatible source. This definitely includes your redbook, & HDCD's. Whether your player outputs DVD-A signal digitally, I don't know for sure. Some players don't at all. Some players don't output above 96khz thru their optical-out, but will output up to the full 192K thru their coax-out. Not sure about your player. YMMV. But if your player outputs the signal, the DAC1 should be able to sync up with it.
Forget about SACD. There are very few transports that will output SACD digitally, and I don't think your player is among them (if so, I will stand corrected). Regardless, the Benchmark will not accept/decode it anyway.
I found the headphone-out quite powerful. In fact, direct comparisons with a RS HR-2 found the HR-2 lacking in power. The Benchmark can power AKG K1000's, and the K340's (400ohm!) quite nicely. The HR-2 cannot do either. You may prefer one sonic
signature over the other, though. This is personal, so again, YMMV.
While the person who indicated the going used prices of each device in your WTB ad was threadcrapping (and was deleted), he was correct. A used Benchmark sells for a few hundred more than a used HR-2 these days.
Hope that helps a little. As always, IMNSHO