I agree about HDMI not being of much use on a receiver
Look at it from this perspective. The reason for having ANY video, yes I understand HDMI also carries audio, source on a receiver is to simplify the switching in you home theater system. When composite video started showing up on receivers it was because there was no other piece of electronics in the hardware chain of a home theater system that could so easily serve to switch the video inputs.
Many manufactures have also made external video and video/audio switches which is another way to accomplish the switching in you home theater system.
Which is better, from a standpoint of video and audio quality they are about equal. My only hesitation is that some external switchers are really cheaply made, I had a fairly expensive one from Sony that fell apart faster than I could get use to using it. I have not seen a stand alone HDMI switcher yet but someone must make them.
So my choice would be to go for the receiver with the best audio quality/power/Dolby decoding scheme in that order. Switching is not even something I would consider using on a receiver as it means running longer calbes, usually, fromt he DVD to the tv and receiver.
Ed