I have a SamSung LN46A550 1080P TV and want to buy a blu-ray player to utilize the 1080P picture quality. However, my receiver a Denon AVR-4306 only supports 1080i and does not support the new Audio formats introduced with Blu-Ray. There is no money for me to upgrade to a new receiver so my question is this:

Is it possible to use an HDMI connection out of the blue-ray directly to the TV for the video, but still pass audio back through the receiver?

Am I correct that HDMI is the only option for getting 1080P picture quality?