TV - Sky+HD - PS3 - Surround Sound set up

[scachia]

Wow guys - some of you lot are geniuses - fair play!

I've read and read and learned so much, but as it happens i'm still stuck with my own gear, or at least have tried my best and would be greatful if someone could give me the thumbs up (or down).

For starters I have:

Sony Bravia 1080p Full HD KLD37W5500
Sony PS3 Slim (250gb) i think?
Sky+HD Amstrad DRX780UK
Sony Surround Stereo System MHC-NX3AV
Wireless router
Monster HDP 850G Powercentre
2x Monster HDMI Cables
1x Optical
and countless other scarts and red & whites etc

I think I've got a good start there, however stereo might be leting me down?!

Setup is:

PS3 to TV via HDMI
Sky to TV via HDMI
Optical from TV to Stereo
Ethernet from TV to router

Ignoring the router bit, have I got the basics here?

My stereo has various red & whites available? Should I be using these instead or aswell as optical, maybe for the sky box etc?

Will my stereo even do full surround or 5.1? It's pretty old but was good in it's hay day?!

Also, I've listed the monster stuff and the router just in case anyone knows any other good tips or advice with the whole setup i have - i'm discovering lots as i go through all the settings everything has. Connecting hardware is one thing, but then to do all the options aswell. No doubt I'll be writing another story on here! great that the tv remote works the ps3

Any help would be very much appreciated. I need to convince my old man, it was all worth the £ too!