Thomas,
Most of what you've read/heard about the picture degradation through component-video switch in the receiver is the 'net legend. I myself was quite anal and obsessed about this, until I found that my eyes cannot detect any appreciable differences in the picture quality whether or not the component video signals go through my receiver. Incidentally, I am using a 720p-class front projector with a 120" screen, so I have reasons to be anal about it.
Video switching done in the receiver will make everything MUCH more ergonomic. Having failed to detect any picture degradations, I of course feed all the component video sources through my receiver.
