I found the thread below on a different site. Are you recommending I avoid option #2?
1) I have a question about hooking up STB's. Your advice is to connect HDMI to the TV directly and run digital audio from the STB to the receiver. If I understand correctly that would require choosing the input on the TV with the HDMI to see the picture and selecting the correct receiver output to hear the sound. Then if you wanted to watch Blu-Ray I assume you would change the input on the TV to the one the receiver is connected to and selecting the Blu-Ray output on the receiver to view the show
2) What's wrong with this, HDMI from the STB, and Blu-Ray to the receiver, and then HDMI from the receiver to the TV for watching home theater, and component video and analog audio from the STB to the TV for simple direct STB to TV viewing. This would allow one input on the TV for all material played through the receiver which is IMHO a more simple and less confusing (to people other than the HT's owner) set-up.