Receiver options
I think that the mid-fi receiver options from Yamaha and Denon in the $1k price range will meet your needs. Check out the Yamaha RX-V2600 and Denon 3806 and 2807 models. You will have to pay an extra $100 for the Ipod dock.
These and many other receivers will allow you to assign the receivers amps to run a 5.1 main system and powered Zone 2 speakers. Since you will run 4 zone 2 speakers, make sure that you have impedance matching volume controls (they will have a small jumper with 1x, 2x, 4x, etc.) or add an impedance matching speaker selector box to protect the receiver.
Here is a summary of some of the current HD features:
HD compatable: Will pass 720p and 1080i signals (maybe 1080p) over the component video and HDMI connections.
HD upconversion: Will convert component video, svideo, and composite video to 480p HDMI.
HD upscalling: Will convert a 480i/480p signal to 720p or 1080i output over HDMI.
You may need to wait a couple months if you want the receiver to pass a 1080P signal. I think that the soon to be released Yamaha RX-V2700 will have this feature.