If you just don't want the kids messing with settings, but don't mind them just using the receiver, the 2807 at least (what I have) has a setting that allows you to basically "lock" the settings with a password so nothing critical gets changed...that, coupled with a universal remote where the kids can just push "Play Game" or something similar would be the easiest solution.
To do what you want, you need to have everything run through the TV and then an output from the TV to the receiver. Unless your TV has HDMI out, I would think you would stand to lose quite a bit of sound and picture quality just b/c of copyright protection crap (high def over component, I think it, at best, is 1080i, but in some cases may only be 480i/p?) and you would be limited to DD and DTS tracks for audio b/c of the limitations of optical outs and digital coaxial outs...