Re: Help with Receiver Hook up to all these darn things?
Most receivers will not pass HDMI through when they are off. Your results may vary.
As far as sending SD devices through the receiver, it depends on whether the receiver will convert from composite to HDMI. Only the most expensive ones will do that.
So, if your suggested hookup will work for what you want to do, go for it. Nothing wrong with what you suggested, assuming your receiver will cooperate.
As far as the optical output on the TV, most HDTVs will only output the audio from the internal tuner.