ie. HDMI switching... what is the purpose? To save ports?? I only need one HDMI input for the cable box so do I really need hdmi switching???
ie. HDMI Up Conversion... does this mean that if my cable box is runing 480p the reciever will up convert it to 720p (my projector is 720p)
HDMI switching would allow you to run one single HDMI cable from the receiver to the projector if the projector has an HDMI input. It's the same idea as using one set of composite/s-video/component cables to the projector instead of one from each source device to different inputs on the projector. Letting the receiver do the switching means that you never have to change the input on the TV/projector.
HDMI 'upconversion' usually means 'transcoding'; if say the PS3 were connected to the receiver via component video cables and the receiver to the projector via HDMI, then you'd need the receiver to convert component video to HDMI.
480i -> 720p is deinterlacing (i->p) and scaling. You don't need the receiver to do the scaling as the projector will do it.
XM Radio is worthless in my opinion, but I'm sure many people feel otherwise. If you like the selection on XM and don't mind paying a monthly fee for 'radio' then you might want that feature.
You can connect an iPod to any receiver but those that advertise iPod compatibility provide extra convenience features like the ability to see the song name and artist on the receiver display and use the receiver remote to control the iPod.
The 'features' that I don't care one whit about are dozens of DSP programs.
If you need HDMI switching you could look at the Onkyo 604. If you also need the upconversion, look at the Onkyo 674. Denon/Yamaha/Pioneer all offer similar receivers.