For you current system.
I'm not really sure what is the use of the Optical and Coaxial inputs on the S530D....does it docode DTS and DD as well?
If yes, than it will be great.

For your second system....well..thats good...but pay attention to Speakers and Subs...for me Floorstanders sound more 'full' than all Satellites.
My setup will be Floorstanders (that has at least an 8inch woofer OR 2 6.5inch woofer) will be full spectrum ...center and satellites lower freq will be handled by the Floorstandards....wherelse Subwoofers are handled separately from the 5.0....Sub for me mostly for explosion and effects..this setting can be done on most Amp.

Yours setup I think is Satellites and centers lower freq will be handled by the sub...truthfully, I dun like how a sub sounds with music cause they are more for Vibration or air movers rather than sound. Its best to leave the hard bass for the Floorstanders and the Sub bass for the Sub Box.

When talking abt Sub woofer there are different types...6.5~8inch are good for hardbass...12inch above good for moving mass of air...I really dun fancy pairing satellites with a large Subwoofer....sounds uneven unless those satellites are expensive premium stuff.
Most common you'll find are Satellite paired with a 6.5 or 8 inch woofer.

Dun understand what I'm talking abt...well..you will later..

Fuyoh... my kepala  . So much info to learn from u since my first post about dolby/dts. Gee, thanks. Hehe.

For current system, S530D will be the cheapest solution available for my WDTV. No decoding done by speaker (logitech has it). Direct audio out from WDTV into S530D.

For near future,
Once I get HDi DUNE PRIME 3.0 or HDX BD1, then only let the player decode whatever Dolby/DTS format. And floor standing, for me... will kill my small space... so my setup will look "like" Bose Acoustimass... hehe with small cute satellites (less loud sound) and sub woofer.

Harvey Norman did offer Yamaha v465 with floor standing...package... all for RM2.8k+. My jaw dropped and tongue rolled because it's like cinema @ home ler.

OK, I've read the S530D info....those optical or Coaxials will be only stereo sound....now here comes the problem...

I'm not sure about WDTV 1 if it has ability to decode DTS internally to stereo....I see most ppl with WDTV1 need to convert DTS to DD with is quite a hassle sometimes.

Best is to bring your WDTV1 to the shop to test it with the S530D. Make sure the movie files you have are DTS and some in DD.

Regarding the floorstanders, playing with frequency type of speakers can emit the surround sound? No rear speakers needed?

Afaik, there is no really good substitute for rear speakers...you want surround, you got to have them...of course a few of company like Sony and Yamaha have their own technology to simulate surround without the rear speaker..