The Integra 7.9 does decode the new audio codecs. I would let the Integra do the processing. If you use the analog out from the 103 you may loss the room correction in the Integra unless it turns the analog into Digital. If you are going to do that you might as well send Digital via HDMI to start with.
Most modern Blu Rays are 1080p so you are correct that not much processing needs to be done to the picture. Unless you are pretty picky, the Sony will probably do as well as the Oppo for Blu Rays.
For DVDs, the Oppo may do a better job of upscaling than the Sony. If you are happy with the DVD picture from the Sony, you might not need to change. The 7.9 has DCDi video processing by Faourdja, which is pretty good. If you can, try a DVD with the Sony not upscaling the video and let the Integra do it. Compare that to the Sony doing the video upscaling.
Streaming Netflix video from you Sony is probably already 1080 if you have good bandwidth. So I am not sure you will see a great improvement with the Oppo.
The Integra is a good unit, probably pretty comparable to the Oppo for video upscaling. The Oppo is a very nice player. But I am not convinced it will do a better job than the Sony/Integra for the video you describe.
You can always try the Oppo and return it if you do not see a great improvement. Costs you the shipping cost.