Superb quality audio and video !! I output Sky HD via component (channel 2) and upscale to 1080p, so that all channels, even the worst SD ones, give a quality picture.
Sound via Sky , Blu Ray and DVD are superb, it handles cinematic pyrotechnics with aplomb and also handles the subtle atmospheric parts superbly.
CDs sound awesome too, finally I have one box that will cover all my musical and video needs.
I previously owned an expensive Yamaha and despite the mags raving about Yams, I would recommend you stick to this Sony and this price range, from my experience this is the best quality you can hope for and you will not notice any difference if you spend twice as much.
I run this through B&W M1 s + B&W subwoofer.
The lip sync mentioned elsewhere, is occasionally noticeable on Sky channels, but it does vary from channel to channel and is the Sky source as far as I'm concerned, it was no better on the expensive Yam, I previously owned, so definitely not the fault of the Sony. Most channels are fine and you can adjust the delay via your Sky HD box as well as this Sony unit anyway, but for most Sky channels you really won't need to.
Buy and enjoy....