Do I really need a AV receiver if I tend not to run video through it and only audio?

Open the wallet and relax:) Buy a good quality AVR and run everything thru it. Your video quality will not be degraded. I prefer a pass-thru only unit that performs no video adjustments.

Why are you using optical audio? Use HDMI if you watch Blu-rays.

I just commented in another thread regarding Denon and you might add this to your auditions. If I were picking an AVR price no object I like NAD.

You really should be running it all thru a quality AVR using HDMI.

Lose the optical audio for Blu-ray.

Rick

An AV receiver is your only practical option if you want mulitchannel surround sound. AV-less receivers are all stereo receivers.

On the other hand, given that you had your sound routed through your TV you may not have been getting true surround anyways. While you can get 5.1 Dolby Digital from your TV's own internal sources you're usually limited to just stereo from sources connected externally to the TV. Using HDMI through a receiver will let you get up to 7.1 discrete channels through DTS-HD, Dolby TrueHD or raw PCM. Otherwise you're just simulating 7.1 up from 5.1 Dolby Digital/DTS or plain stereo.

Some receivers DO degrade video, read about the 24p bug the Onkyo 818 HQV chip (regarded as one of the best) has (first proven by me objectively) and other issues with some previous Onkyo, NAD, Arcam and Anthem units.

People used to say until not so long ago all 24p video from all BD players is the same, until the Secrets of HT started measuring HDMI output. Nobody has measured HDMI output on receivers, so you just can't say with confidence they don't mess up video.

But at the $300-400 range many receivers don't even have a dedicated video chip or do any processing. Some don't even upscale/upconvert. You just need to do your own homework and find out about each model you shortlist.

Video problems aren't necessarily linked to HDMI connections problems. If there are HDMI problems, you get problems with audio via HDMI too.

There are other options to split up HDMI to audio and video feeds and avoid sending video to receiver but would be beyond your budget.
Edited by Kilian.ca - 1/5/13 at 6:53pm

Even with your old setup, it would have been better to send optical to the receiver instead of the TV to ensure you got 5.1.
Problems with video signals for a particular receiver line should be apparent and probably covered in the thread for the receiver you are considering.
HDMI handshake issues can occur with cable boxes - using the right turn on sequence with the Harmony remote may help - generally no issues with blu-ray players.
You can still route some items, say the cable box, to the TV by HDMI (with optical to the receiver) while routing others to the receiver by HDMI and then to the TV by HDMI.
As mentioned, you get the highest blu-ray sound quality by sending HDMI to the receiver. For cable boxes, the optical cable to the receiver is sufficient for Dolby Digital 5.1.
Some newer receivers have GUIs that overlay the signal, which is bypassed by sending HDMI to the TV directly.
Since you said you use 7.1 in your main zone and also need zone 2, you need to ensure the receiver has zone 2 preouts. Some receivers power zone 2 with the extra two channels, making a 7.1 system effectively a 5.1 system, and some can do both. There is also a limitation for zone 2 - most receivers can't send digital signals, including HDMI, to zone 2. So you need to also hook up parallel analog audio cables.