MS added 1080p over component in an update after that article was written. So, it is possible that if his display accepted 1080p, but the 876 will not, then 876 did indeed in effect "cripple" the poster's 1080p 360 setup.
Further, regardless of how good a display's de-interlacing is, it simply can't de-interlace 1080i and make it look as good as 1080p from real-time 3D game content
. However, film-based HD DVD content should be just as good, provided the display has a good inverse telecine implementation in its video processing. That may or may not be true.
If it's truly a big deal, the poster may have to to upgrade to a newer HDMI-based 360 to get back what he had. Whether it worth it for the poster depends on how much gaming he does, and how many HD DVD's he has, whether his display has good de-interlacing... as well as how much money he has to throw at toys.
I'm so close to pulling the trigger on an 876 - so close. I just have a little decision paralysis. Not really about which AVR... about whether the spend the money right now. Can't get off the dime...
I wish somebody would hurry up and write a comprehensive review!!!