Welcome to Home Theater.
You are correct that the best way to hook up your video sources is straight to your TV. Unfortunately many of us do not have TV's with enough connections on the back. That is where a receivers video switching abilities come into play.
If you are going to use your receiver for video switching, make sure it uses high quality components. Many "less expensive" receivers use inferior video switching components and your picture will be affected.
Surf around for a while on www.hometheaterforum.com and you will have more knowledge on this subject than you ever imagined.
Enjoy!
B_man
