Hi Nick,
I understand your confusion as I was where you are now a few weeks back. It took me a while to grasp all the nuances of HD coming from a longtime SD background.
I think you have most everything you need to know covered in your post here and for the most part you are correct with your statements and assumptions. Just for clarification I will try to address your issues with the caveat that I'm sure there are others who could answer them better.
First lets tackle the issues of the new receivers with TrueHD/DTS-HD MA decoding. This had me very confused when I was first looking into HD as I thought you needed one of these receivers to listen to those audio tracks. I l learned that that is not the case as the players themselves decode these tracks and pass them over HDMI or 5.1 Analog outs to the receiver as PCM. Think of these new receivers with the built in decoding as being 'future proof' to an extent. If you remember when SD DVD first came out, most players decoded Dolby Digital. With the advent of newer receivers with the decoding built in, most SD DVD players have dropped these decoders and have the receiver handle it. The same will follow with HD DVD. The HD players will eventually just pass the signal to the receivers and have them decode the tracks. As was stated in previous threads, no current players can actually pass the TrueHD/DTS-HD MA tracks. Some new ones announced in the last couple weeks will be able too as (I assume) will most future HD players. In the end, whether the player or receiver is decoding the track, you are getting the exact same output.
You are correct with your assumption of how to connect the player-receiver-tv with HDMI. You will run an HDMI cable from the player to one of the HDMI inputs on your receiver. Then you will run an HDMI cable from the HDMI out of the receiver to your TV. The HDMI cable will handle both audio and video so it will be the only connection type needed. This connection will handle all your needs for both HD and SD material. On SD your DD or DTS track will be sent over the HDMI. Most players upconvert your SD video signal over HDMI so you receive that benefit also.
The only real decision left is which player to get. Both formats have their pros and cons. I will state that I have both so I am not biased to either. I started with a PS3 for Blu-ray as everything I read at the time pointed to Blu-ray being the eventual 'format war' winner. A week after I got the PS3 the Paramount/Dreamworks HD-DVD exclusive announcement was made. Instead of taking part in the war, I decided to go neutral and added a Toshiba HD-A2 HD-DVD player. I couldn't be happier with both of them. I also upgraded to a Yamaha RX-V661 as my previous receiver (Pioneer 1014-TX) didn't have HDMI. My current 65" RPTV doesn't have HDMI so I am running component for video as it will be a while before I can upgrade my TV.
Hope this helps!