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The only real reason to use the reciever to do the switching is if you have more devices that have component out than you have inputs in your TV/Video source.
For example, my projector only has 1 component video input but I have 4 devices that have component out (X-Box, PS-2, DVD, Satelite TV). For this reason, I run all the sources into my receiver and have only one component out going into the projector.
Hope this helps.
JB
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