The Monitor I am using has 2 HDMI connections and I was planning on connecting both my PC and PS3 via HDMI.
Is it better to connect the PC via DVI or HDMI?
And secondly I will probably be using the Headphone jack of the monitor to either run to my speakers or directly to my headphones will this still make use of my soundcard (ASUS XONAR DX) or will I only benefit from the soundcard if connect directly too it (i.e Not through the monitor)?
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Connect your speakers directly to your soundcard.
Agreed. Connect directly through the soundcard, because the signal will degrade by going through the monitor first.
As for DVI/HDMI, video wise, they output the same exact signal. HDMI has more bandwidth though.