glweeks,
I had tried running DVD component out to component in on my receiver (Onkyo TX-SR800), and from receiver to TV and found the picture quality to look worse when compared to a direct DVD to TV (Samsung HLN507W) component connection. The direct DVD to TV connection was in my opinion more "clear" or "crisp." There may be a difference with the newer generation Onkyo receivers. I suspect the best bet would be to try both connections and stick with the one that is most pleasing to your eyes.
I had tried running DVD component out to component in on my receiver (Onkyo TX-SR800), and from receiver to TV and found the picture quality to look worse when compared to a direct DVD to TV (Samsung HLN507W) component connection. The direct DVD to TV connection was in my opinion more "clear" or "crisp." There may be a difference with the newer generation Onkyo receivers. I suspect the best bet would be to try both connections and stick with the one that is most pleasing to your eyes.