HDMI and Component video are pretty much equivalent quality as far as the video signal is concerned. HDMI w/audio presents a scenario that helps reduce cable clutter that's about it.
If you were to use this Onkyo system, I would run everything via component video through the receiver, and have one component cable from that to the TV. Use digital coax or optical for the audio from each source, and make sure you have it plugged into its corresponding input that matches the video from that source. That way you can use the receiver for switching purposes too. It may create more clutter behind the console, but simplifies operation of it from the front.