#1) I personally think all Sony audio products suck--especially their speakers. I have a Sony HTTiB in my bedroom.
#2) No pros or cons. It's a sound bar. Are you doing anything for rear channels like wireless? If not, I would use the stereo downmixing on the BH200. Set the BH200 to stereo PCM and send it out via HDMI. This puppy won't decode high res audio codecs. (Neither will my Harman Kardon AVR. IMHO, decoding should be done in the player anyway.) The other alternatives are to send out DTS or multichannel PCM.
I grabbed some specs on this from here... At least it does multichannel PCM over HDMI and DTS! There are quite a few (expensive) receivers sold that don't do multichannel PCM. *Cough* Cambridge Audio
http://www.compuplus.com/i-Sony-HTCT...21f7x576l1gac4
As this is a 3.1 system, you should just send it stereo. Ain't nothing wrong w/ stereo.