Well, you don't need a home theater system if you purchase a 7.1 set intended for the PC I guess. These typically aren't very powerful or higher-end though. I guess it depends on what you expect out of your sound source and what you're going to do with it. I can't tell if you're going to use this in the living room, computer room/bedroom, or a bit of both.
If it's for a home theater (living room) you really want the AV/R to do as much as possible and output to it's own speakers. Right now you're sending stereo (possibly mono) and not letting the AV/R do any work, so it's technically in a 2.0 configuration. If you want the AV/R to do 7.1 (and it is capable of 7.1), then you'll want to use all the channels into the deck. There should be an optical port on the back of the board and that's really the way to go if the AV/R also has one. Then the receiver is getting it all and dealing it out on it's own.
Just confused on what you want to do...sorry!