I would go with option 1....
You really don't want to use your PS2 for movies....
Its just like anything else, the more you use it, the quicker it will wear it out....
Also if you go the "option 1" route....You will have a more versatile system.... Not only will you be able to hook up your PS2, but you could hook up "almost" anything else you can imagine...
Beleive me...There is nothing like playing your PS2 through a dolby digital receiver and good speakers....(Will make you FEEL like your inside the game instead of just playing it)
