Upconverting
I believe that the 3806 will only upconvert any composite/s-video/component source to 480i over HDMI and the new 2807 will actually upconvert/upscale it to 480p. I am not positive, but I think this is the case.
Also, YOU WILL NOT BE ABLE TO switch HDMI from a cable box until the cable companies implement the firmware updates to allow HDMI repeaters. Most DVD players with HDMI will pass through the receiver fine.