Onkyo 674 or 804 or Dennon 887 -- then what speakers?

All of this has been discussed but I just need a quick and dirty recommendation / suggestion.

I'm upgrading from the Onkyo HTS780 7.1 HTIB and really I don't have any complaints. The reason for the upgrade is that I now need HDMI and more component inputs to accommodate all of my new toys and my new DLP 1080p TV.

I have an xbox 360 with hddvd (vga or component?), wii (component), HD DVR (component), xbox 1 (component), and a slew of gamecubes, snes, nes, n64's and other gaming systems that I want to hook up.

So my first question is should I go with 804 or 674 from Onkyo (or that Denon which is a bit out of the price range). Which does better HDMI upconversion? Why is the 674 more expensive on Amazon by $25 bucks? I don't give a whole heck of alot about THX certification.... Does Audyseey work on the 674?

Should I wait and buy a receiver that does HDMI 1.3???

After I nail down the receiver, I'd like to spend $500 on a 7.1 speaker package. I'm being told that the Velodyne front row set will set me back $300 then I can spend $200 on a sub. All and all -- I'm in it about $1,100.

Is there any better bang for the buck than this?

Do I wait for HDMI 1.3 even though my doesn't say it will support it?

After reading all the praise on this forum I decided to put in an offer for a BIC Acoustech 5.1 System.

HT-65 Center
Pair of HT-75 for Fronts
Pair of HT-63 for Backs
H-100 Sub

I submitted the offer to sound distributers on ebay.

So now I'm just need some advice on the best 5.1 receiver that does HDMI upconversion on all of the signals. I'm a heavy gamer so the lag and frame-dropping issues I was reading about are my #1 concerns.

Thank you!

Does that info all apply to the Onkyo 804 also?

bump for the morning crowd... i want to make the purchase in the next hour.

Guess in summary... What is the best sub $700 receiver? Should I wait for HDMI 1.3?
Thanks

Bought the Denon AVR-987

Couldn't be happier. A++ recommendation from me (after really scoping sony, yammy, onkyo the denon became the clear favorite)

I'm not sure if it warrants $400 -- i haven't played around with that feature as much yet. (it seems like a great one though)

I thought the upconversion / hdmi switching was supposed to be better in the 987 as well. I found mine at CC open box for $835 then they had an additional 10% off sale on it (so like $750). After that I bought the 5 year warranty for $80 so it came out to be about $835 for the avr 987 -- couldn't pass it up.