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For movies it will sound 100% the same, have a look at some of my other threads, high end processors are no different then receivers.

Don't beleive that since we know better from ultra high end processors like lexicon and mcintosh. Lossless audio on a new receiver from a high def source is going to sound far better then what that rotel can produce.

Don't assume by the elite name you will get elite sound, if you don't care about the new audio formats you could buy something used off of AudiogoN high end audio auctions, classifieds, hifi chat

Then do just that, run your 2 front pre outs to your amp and run the rest of you speakers off of the selected speaker outs on the onkyo.

Looks good to me.

Did you setup the receiver in its option menus?

I agree it would be so much easier if they just allowed 1080p through component.

Good to see this will be a must buy.

If you have the money going with the velodyne setup would be easiest.

Yes and do not be fooled by "high end" wire or cables.

Connections rank as followed. Video; HDMI Component Svideo Composite Audio; HDMI Digital toslink/coax analog RCA

No, why would you want to do that? The 805 is a 7.1 receiver.

Indeed, buy a new future proof 7.1 receiver.

For that much I would look at a HTIB or just use the built in speakers with the TV.

Stick with what you have, unless you spend a lot more money I doubt you will notice a difference.