Originally Posted by Atl_Pat
Does that mean that there is no benefit for me to run HDMI cables outside of the receiver? Thanks.
There is no benefit if you run HDMI from the PS3 to the display. There is one, possibly 2 benefits if you run HDMI through the 2807: the saving of one connection and, possibly, 7.1 sound as well.
There is no benefit in going HDMI from the PS3 to the TV since all you want sent to the TV is video. For currently available sources including BD, all you need for the video is HDMI 1.1 so routing the video through the 2807 will not lose you anything. HDMI allows some higher bandwidth video to be passed but no current source uses video of that bandwidth and HDMI 1.1 passes DVD and BD video perfectly.
Passing the video through the 2807 via HDMI also lets you use HDMI for audio to the PS3 and that will let the PS3 output 7.1 channel soundtracks on discs that have them. Via the optical cable, the PS3 is limited to 5.1 channel output because of bandwidth limitations with optical cables. You will get the most the PS3 offers with audio via HDMI also, and you save the optical cable.
If you don't have a 6.1 or 7.1 speaker setup, you won't gain anything from using the HDMI connection but you do keep your connections as simple as possible.
The big benefit of HDMI 1.3 is the ability to pass the BD lossless audio codecs in bitstream from player to a receiver that can decode them. The 2807 can't decode the new codecs so you need to have whatever player you use decode those soundtracks and pass them to the 2807 in LPCM form. The PS3 is actually unable to pass those codecs in bitstream form anyway so you have no choice about using LPCM with the PS3 and new audio formats which means there's nothing to gain or lose by not having a HDMI 1.3 receiver with the PS3.
The 2807 actually handles everything the PS3 can output. If you had a receiver with HDMI 1.3 and the ability to decode the lossless codecs you would actually need a different player than the PS3 if you wanted to have the receiver decode those codecs. The PS3's hardware does not allow it to pass those soundtracks to the receiver in bitstream form for decoding.
Bottom line: Keep things simple. Go HDMI from the PS3 to the 2807 and HDMI from the 2807 to your display. That's what I do. You get the benefit of everything the PS3 can do with DVD/BD playback and you use the simplest connection method possible.