That's probably subject for a different topic - as video processing goes on inside every plasma, dlp, and lcd on the market to make the video signal fit the screen and often times outboard processors do a lot better job with the video than the on board processors. As well, the conversion from composite to component provides a more stable wiring system which can more cleanly carry the signals from your equipment to the display device. Finally, upconversion allows on-screen menus to be displayed on the component inputs of the display device.
All that said: The RX-V1500 is the new Yamaha receiver and I am a big fan of all the functionality it offers. You may not care about zone 2 or 3 functions or things like that though, so there are lots of other great offerrings out there for your money. But, Yamaha will give you that reliable, daily watcher, that you can run for 10 years pretty darn consistently. At 800 bucks, it won't kill your bank account the way really top notch gear will. I'm not sure where 'really top notch' begins, but I'm pretty darn sure that 800 bucks isn't it. Rotel offers some pretty bang for the buck audio gear that I would place more in the 'top notch' category. Still more than 800 bucks though.
Oh, and it looks like the Yamaha 2500 (out sometime next month?) is more a head-to-head competitor with the 3805. It's MSRP is $999.00 with 3 component switching and a whole lot of other bells and whistles. There is a preview from CEDIA here on this site with a back panel photo to drool over.