I hate the fact that the 806 doesnt pass through my 1080p signal unmolested and dont like what im hearing about the 805 not doing the latest codecs.
Two questions for you. What is the 806 exactly doing to the 1080p signal? The 805 has support for the latest codecs, and I've never once seen it said otherwise.
I use an 805. I believe some of the other owners might include aberkowitz and jvgillow. I think it has so far worked perfectly fine, as advertised, for all of us, but they can chime in otherwise for themselves.
AFAIK, the singular benefit of the 806 is the addition of Audyssey Dynamic Volume and EQ. FWIW, there are indeed some users of this new tech that claim they will never, ever go without it.
The 805 has a much beefier amp section. It has the best consumer version of Audyssey calibration in Mult EQ
XT, uses Burr Brown DAC (same model used in the $7,000 Denon AVP, just not as many of them), passes 1080p/24 untouched via HDMI.
If you want that level of amp or Audyssey calibration, today, in Onkyo's lineup, you now have to step up to the 876. The 806 downgraded on multiple fronts compared to its predecessor.
I've never tried running component conversion, but I'm pretty sure that should be avoided at all costs with the 805. Even if it worked just fine, I still* typically recommend running such connections directly to display. Firstly, most displays still process video better than most receivers. Secondly, calibrating your video per source input is typically easier/allowable when using separate connections to the tv.
All you lose there is having the inconvenience of hitting one more button on your remote. And if you use a universal remote, not even that.
Hope this helps.