I doubt if this answers your questions, but this is how I have my system connected. It's a simple system, but this is how it works.

Blu-ray player to AVR using HDMI cable; 5.1 + 1080p.
TV audio to AVR using optical cable; 5.1.
External antenna to TV using co-axle; 5.1.
AVR to TV using HDMI cable; 1080p.