some answers
I'm using an older Onkyo (797) and will upgrade soon, but I need to know why these systems have so many HDMI's. I have one TV and No HDMI , so I use HDMI from my Direct TV direct to the TV and also use Componant from my DVD to my TV
1. Is this all about switching and controlling all from the Receiver? When I bought the Onkto I was told that it would take care of this and it didn't although I bought a mess of cables....
Yes, it is about switching and controlling from your receiver. It can also simplify the operation and reduce the number of cables. You will get some up conversion on you DVD player for Standard DVDs. and some deep color benfits
2. My biggest problem today is that no one in the house but me can switch sources because the TV has many Video inputs and I use a different one for each source plus I use various Receiver inputs for DVD , TAPE, and Satallite.
It will simplify your connections and operation.
If you get a system that supports HMDI 1.3 repeating and upconverting, you can use a single HDMI cable to connect each device into the AVR and then a singel HMDIcable to connect to the TV. If you have some older devices that do not support HDMI, you might need optical, component, or even composite. Some AVR systems will upconvert if this is important. Also some AVRs will upconvert standard DVD to 1080i or 1080p.
What receiver under 1000.00 would solve this for me once and for all?
There are a lot if you like Onkyo here is one make sure it says repeater and upconversion. The minimum one you want is TX-SR606. You will get deep color and upconversion from component to HDMI.
Marantz 5002 and above will work. Yamaha RX V-663 and above will work.
3. My sound is excellent so am I at risk of purchasing equal or less quality by replacing a perfectly fine Onkyo 797 just for some better switching?
If you are okay with your sound ,then you might not gain that much upgrading except you will add deep color, have less cluttered cables, be a little more future proof and allow others to more easily switch systems ( my wife can operate my system now, i think that is good but I'm not sure

).
4. Is there a link that explains all this well?
Yes ,
but everything they say is not always true because HDMI was an evolving standard and not every manufacturer followed all of the earlier HDMI specs during HDMI 1.1 and HDMI 1.2 Even though it says they support both audio and video, which is waht they were supposed to do, most equipment does not fully work together and support both video and audio until you get to HDMI 1.3
Audioholics has a good write-up on HDMI :
http://www.audioholics.com/education/display-formats-technology/understanding-difference-hdmi-versions/
Good luck, I hope this answers some of your questions. If not let me know
