Problem is my TV is not ARC enabled, so I am limited in my options. So what's my best option then, if I am to continue playing films via HDD? If I use a media player plugged into the AV, then can I just connect AV to Tv with HDMI for the picture, and use the AVI to external speakers for the sound? All I want is to ensure the sound is processed via the AV rather than the crappy sound in the TV.
Does your TV have any form of audio output that is compatible with any audio input on the AV amp?
If so then simply run an appropriate cable between the two and use the AV amp for all audio duties.
If you are unsure post the make and models of both TV and AV amp and I'm sure someone will know what the options are.
And if you do use a separate media player with HDMI and HDMI inputs on the AV amp then the amp will suck the audio data out of the HDMI feed and deal with that itself and send the remaining pictures onto the TV.