Doug - just so you know the basics. Composite video came first. This is the signal you get with one RCA, usually coded yellow. Chroma and luminance signals are combined. This is all there was for many years. In an antenna feed, it was also composite but the audio was present as well.
The next advance was S Video. S keeps the chroma and luminance signals separate until it hits the TV. The signal stays cleaner - very popular in 90s era pre DVD VHS decks. Never was a broadcast format. Doesn't carry audio.
The next advance was component video. This is three separate plugs, usually bundled together in techflex to keep things tidy. One each for R, G and B which are the three colors used in all projection/panel/CRT devices. (The other color standard is CMYK which is only used for print.) Again perceptibly cleaner. Once again this was not a broadcast standard, and once again it didn't carry audio. However on the new Direct TV HD box I just had installed, there is a choice of S, component and HDMI out.
(Not sure how it worked but on my Cal Audio DVD player you could build a special cable that took two of the component outs and brought them together into a S plug - looked fabulous because it had a much better S/N.)
At about this point in time - say 5-7 years ago, computer and television display technologies began converging. Also home theater was exploding with the flat screens and surround sound was making ever bigger cable harnesses.
The first evidence of this was DVI. This eliminated the chaos associated with the three component cables. Works slick on computers and apparently on home gear. Once again this did not carry audio. It also gave the home theater installers fits because they had to drill big holes to get the plugs through studs etc.
So now enter HDMI. And the ballgame changes big time. High-Definition Multimedia Interface (HDMI) is an all-digital audio/video interface capable of transmitting uncompressed streams. HDMI provides an interface between any compatible digital audio/video source, such as a set-top box, a DVD player, a PC, a video game system, or an AV receiver and a compatible digital audio and/or video monitor, such as a digital television (DTV)
HDMI carries both audio and video signals in an uncompressed digital format in one cable with one connector at each end. Essentially 11 connections (component plus 7.1) in one small plug that left a lot more wood in the stud. Because it is digital, it offers new possibilities for digital rights management (DRM) of prerecorded media - something near and dear to the entertainment companies. Having HDMI is essential to getting high def off DVDs because of the DRM issue. You will not be able to play this discs any other way. (look it up in Wikipedia - some good stuff)
As Reubent suggests, until now, how you dealt with this was simply a matter of convenience and of working with what you had. Traditioally, the big advantage of routing everything through a receiver was that audio and video switches together - change the channel by pushing a button, but also change between devices (say cable and your DVD player) with a single input change. If you run sound to the receiver and picture to the TV (like I do) then you have to change both the sound input (receiver remote) and the picture input (tv remote).
In addition, there is most certainly the issue of which audio formats the receiver can deal with. And what kinds of connections it can take - for instance my older B&K stops at S Video - no component, no DVI, no HDMI, no progressive scan DVDs, no HD. Finally some of the better newer receivers also do upsampling which is handy if you have high def or 720 screen.
So your opinion about a receiver with S Video only has to be about what you are using it for. if you are building a SOTA room, or investing in a nice plasma and you want HD and progressive etc then its a bust. If you are running an older rig then it might be fine. Plenty of them sound great and have a ton of bells and whistles.
So look at what you want for sources (inputs) and what you want for a display. If you have the display look at what it has for inputs. In fact Reubent touched on another gotcha I just experienced. I just put in the new Sony 23" LCD HD in my wifes office - real SOTA stuff - 5 video inputs. But guess what, only one of them is HDMI - so now I have to choose between connecting the DVD player and the DirectTV box via HDMI (both of which have HDMI out). fortunately its a 1 meter run so it doesn't matter but I hope you get the point which is that HDMI is changing the game beyond connectivity to compatibility.
