Your BluRay or HD DVD player will decode the True HD audio and send it to the Yamaha as MPCM which the Yamaha does process and output.This is the same quality sound as the bitstream from the player,which would be used if the the receiver did the decoding.
There is no proof that the 663 has a better amp than the 661 other than that it is rated 5 watts per channel more.Manufacturers' wattage ratings are very subjective as well.
Bench testing has proven very little difference between the Onkyo and the Yamaha,but anecdotally there have been a lot of bugs with the Onkyo,from pops and clicking to HDMI issues and extreme heat created by the unit.