The Insight DAC reads the (redbook) 2-channel PCM digital audio signal, which is 16 bit sampled at 44.1khz.
Most digital players have a setting to convert all digital out to PCM. (Even most multi-channel (surround sound) DVD players have an option to 'downconvert' to PCM.) Check the specs on your player, but my hunch is that you can make it work. The insight won't "convert everything", but it does accept the most widely used industry standard out there. (And despite what you may read or want to believe, people cannot reliably detect between 16/44.1khz signals and 24/96khz signals. The magic isn't in the sampling or bitrate, it's what is done with the signal after conversion.)
I think you've got a really great idea. Use the Sony as a transport, and the DAC for HiFi audio. (Continue to use the PS3 analog out for games, if you're into the surround-sound gaming environment.)
My first purchase would be the Insight PreAmp, and then the DAC (if funds didn't allow a simultaneous purchase). I think a great pre-amp would give you better bang for your buck.
What amp are you planning on running? The AVA Insight Control Amp may be a great option for you...