i am looking to hook up a new Denon 1908 AVR to a Sony XBR4 and i am trying to figure out the best way to hook up the components so that i can watch TV without the AVR if i choose, or have it go through AVR when i want to.

I have Cable box with 1 HDMI out connection
Sony XBR 2 HDMI's available (mounted over fireplace)

i was going to connect the cable to the AVR via composite and have the TV connect to the AVR and cable box seperatley via 2 HDMI's. this way if i want i can listen to TV without going through receiver. i i go thru the receiver, then it would be cable -> via composite to Denon 1908 ->SONY XBR via HDMI. will this work?

i am a AV newbie, so any advise is appreciated.

Cable box -- HDMI --> TV
Cable box --optical--> AVR

You get audio and video to the TV via HDMI without going through the AVR.
You get digital audio to the AVR when you want to run the sound that way. Simply mute the TV speakers.

There's one potential issue here depending on your particular cable box. The HDMI handshake between the TV and cable box will tell the STB to output two channels of PCM. Some cable boxes use the same setting for all digital outputs, meaning the the optical output would also send stereo PCM instead of DD 5.1.

I have a Comcast Motorola DCT-3412 cable box with HDMI to the TV and optical to the receiver and it works just fine.