Thanks for that link! It is a bit confusing. I don't have anything 3D so that's not an issue for me.
1) Regarding HDMI handshake / protocol
Regular HDMI video sources, such as DVD player, Blu-ray Player, Cable / Satellite Box, and the newest AppleTV (1080P capable) can process HDMI handshakes to suppot multiple HDMI display units. Basically, the display unit continously sends its EDID to the video source, so that the video source unit can collect all the video and audio requirements from all the connected units out there, then the video source has to figure out one COMMON video and audio format to send out, so that all the displays out there can have video and audio at the same time.
Compatibility issues: in certain displays and video source combinations, the video source can't find / provide a commonly acceptable video format to allow all display units to have picture at the same time; it is a compatibility problem. This has nothing to do with the splitter.
The HDMI handshake processing time is up to the video source unit, the brain of the setup, and is determined by the components involved, not by the splitter. Splitter simply passes the info, performs like a bridge.
Because the video source has to pick and send a commonly acceptable video and audio to let all receiving units to have video and sound, this introduces downgrades. The video foramt will be determined by a connected TV with the lowest video resolution, and the audio will likely to be 2CH stereo, as most TVs are stereo.
Splitter does not have signal processing capability, it can't change 3D video into 2D video. To get 3D, all components connected to the splitter must support 3D, or the 2D components must be disconnected from the splitter.
Because if the video source sends 3D, then the connected 2D display will not have picture. When the 3D source unit detects a 2D display unit out there, it will complain that it doesn't detect a 3D display, because 2D takes the priority.
Splitter does not have processing capability to change video format, differet grades of splitter have different bandwidths, lower bandwidth splitter will downgrade video quality, but it will not downgrade / change incoming video format.
If my TV accepts more than two channels (I think it accepts DTS and and a few others), but then downgrades itself, I wonder if it would send the intact audio or still down grade it?