What if I plug in my Arcam integrated amp into the 2 pre-amp front channel RCA inputs in the back of the yamaha receiver?Those front channel RCA's are outputs, not inputs. The only way to connect the Arcam and Yamaha together is to let one act as a source to the other, then speakers will always be connected to the main one. For 2.0 this might be an option, however adding more speakers or a sub for A/V will greatly complicate things.
As far as the OSD, should work fine, just more connection options than actually needed. IMHO, the only difference between DPS-1, SAS-1, and OSD is the type of operation; manual, automatic, or remote control.