I've been playing with the AVR 7300 video processing options for the last two weeks I've owned it.
I set my cable box to output 480i (on non-HD channels) and allow the AVR 7300 to process the video to 480p. I have no doubt that the AVR7300 has a good video processor in it, but as far as it's abilities to deinterlace signals, I'm beginning to doubt.
For the last week, I've been analyzing different video streams from my Pioneer 3510HD Digital Tuner (Analog channels, Digital Channels) and have found that the Receiver just doesn't deinterlace the signal very well at all.
My TV does register the output from the AVR7300 as 480p, BUT, you can see interlaced artifacts while watching TVs and movies.
I've read the manual and it says that it can process both 480i AND 480p video. I'm not sure on this, because you cannot see any OSD of volume or menu's when it's not processing a 480i picture, which tells me that it cant put any graphics over component video unless it's running through the image processor.
I'm going to call Harman/Kardon tomorrow and speak with their support about it. Since I cant pull up the menu while using a NON-processed 480i signal, I can't adjust the settings to see if they have an effect on 480p video.
As far as this receiver goes in general, it's awesome! I'm very pleased, and it was an excellent upgrade from my HK AVR520. Pushing 110w per channel in 7.1 gives this receiver -outstanding- power.