Babek, If you are going to use a coax cable, remember it is not regular RCA audio cable. Coax digital cable must be rated 75 ohms. Good quality composite video cable is cheaper than the "audio" coax cable and serves the same purpose.
I have a Cinema Grand and it also requires quite a bit of volume before it fires up. On mine, only the main channels (and I think only one of them - I can't remember if its left or right) sense an input signal. Your manual should have this information if the signature series II is different...
In regards to my experience with the reliability of the Sunfire products. I've had my Sunfire Cinema Grand for about a year now averaging about 10 hours per week of serious use. No problems whatsoever. I also have a friend with the same unit who probably gives 40 hours per week of serios use...
I think there are quite a few different brands of pre-pro that have this. I just took delivery of a Sunfire Theater Grand III and it has 3 component ins with 2 outs and passes HD quite nicely. Dan