Does the receiver "read" the audio from the hdmi and amplify it? (I know audio doesn't pass to tv, but maybe I won't care).
actually you have it backwards. the 1709 will NOT take audio over HDMI, it will act simply as a 3xHDMI switch and pass whatever it gets to the TV. so it WILL pass it to the TV.
you will need a separate audio connection (optical or coax digital audio) for any source with HDMI which you wish to hear in surround sound.
whether you use the receiver to switch the video is up to you; if you switch at the receiver, you can keep your receiver tuned to one HDMI input all the time. If you don't, you will have to change both TV inputs and receiver inputs when you switch sources.
think of it as a 3xHDMI switch embedded inside of a receiver.
the 1709 does have component video upconversion for all analog video, so any non-HDMI video sources can all be switched in the receiver and passed to the TV with a component video cable. So, if you choose to use the receiver for video switching, you will need TWO cables going to your TV: one HDMI for HDMI switching, and one component video for analog video (s-video/composite/component) switching.
if you have a Harmony remote, then the whole "inconvenience of switching" issue goes away and the only real advantage to switching at the receiver is that you have fewer cables running to the TV. it still may be worth it for that reason, if only to save clutter going behind the TV or especially if you are mounting the TV and running cables in the wall.
Uh huh. You just don't know my family. They are not well trained, or the can't find the remote, or they prefer their other remote... I can't figure it out. Maybe if it get's too complicated with multiple remotes they'll go my way. Meanwhile, I tend to do things like send audio both to tv and to receiver and duplicate a lot of things to make it foolproof.