My experience with HDMI was a PURE nightmare when I put my theater in. I tried 4 different switchers, 4 or 5 different types of cables - ALL with ZERO long term success on HDCP copy protected sources like HD DVD and Blu-ray.
I spent over $3,000 in labor trying to make things work ONLY to use component video outs KNOWING this wasn't the best my Meridian-Faroudja projector could look. At least it worked!!!!!
In the last month, I had to send back the Meridian gear (I am still sad) and replaced it with a JVC RDS2 projector (3 chip DILA) and DVDO VP50 pro. Without fail the HDMI switching works like a charm in the DVDO. The Dtrovision optical cable is a MUST HAVE for videophiles looking to the best in 1080p to their projector and even between their sources. Its easily $800 but it rocks and is ROCK SOLID!!!!
NOTE: my bedroom system has an HD DVR and an HDMI DVD player (a Sony) which work JUST FINE and NEVER have a handshake issue. WHY - you ask? Because they don't have HDCP copy protection which is the REAL problem here.
If you want to see images of my rack when it was hooked up without HDMI check the ModernHomeTheater.com link below. (slides 6 and 7)