Using Apple TV as a multi-room music server

I am trying to decide whether Apple TV is a good choice for use as a multi room wireless music server. I would rather use Apple TV than say Sonos because I like Apple TV's video capabilities. My decision is going to be largely based on Apple TV's/iTunes/Airtunes compatibility with my current 2 zone home theater system.
Right now the AV/wireless system looks like this:
-2 Zone Denon AV receiver wired to wall mounted speakers in the living room and kitchen/patio.
-Airport Extreme wired into cable modem
-Wall mounted speakers upstairs in bedroom (not connected to any amplifier)
Ideally I want to add
-Apple TV wired to Denon receiver/TV w/ hdmi cable
-inexpensive AV receiver/amp in bedroom to power wall mounted speakers
-Airport Express jacked into receiver to stream iTunes library from Apple TV
-Everything controlled with iPhone
Questions:
1. Will this work?
2. Any idea what my best options for an inexpensive Airtunes friendly amp/receiver are?

BorrachoPix, An excellemt thread. Always good to know others doing or intending to set up same similar systems. So many options these days it takes a fair while going through them all. I ruled out Squeezebox as not being user friendly enough and was going the Sonos route untill Apple released the itouch remote app which changed everything and gave me an excuse to get an itouch into the bargin as well !!!!!
Have you though of using a pair of Active speakers instead of Amp and Speakers in the bedroom. Maybe the AudioEngine A2 or A5 Speakers.
Jask, I use to have the 3801 before changing to the 2807. Will probably do as you suggest and go optical and component video to the amp keeping the HDMI slots for SkyHD and the DVD player. I always find the Denon set up menu a bit of a nightmare but usually get there in the end.
Perhaps I should be thinking about an iMac for next year as well to complete the circle......just not sure I can justify the expense.

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