Is hdmi a must have for home theater?

You ask "Assuming you dont have HDMI, why do manufacturers use plain old RCA cables as an option for multichannel input? Why didnt they use 3 (or more) optical or digital cables instead?"

The answer is simple. Optical/coax connections do not offer content protection (i.e., HDCP) which is deemed essential by the content providers. That said, Meridian does do this but, for higher than CD resolution, it is encrypted.

Kal

"The decoders for the major formats (either traditional DD or DTS or the new lossless formats) "SHOULD" be the same whether they are in the receiver or in the player. As long as the player has all the decoders, simply from the decoding perspective, it really should not matter where the decoding happens." - Dtc

Well let me just add that has simply not been the case over the years - at least in regards to old Dolby Dig and DTS processing in the past. Back when, when codecs could be processed either internally or via outboard processors, pertaining to standard lower rez digital Dolby and DTS, my experience was that it always sounded better using the DAC's in the outboard processor over those in a standard DVD player! Infact, not only did AV reviewers frequently make mention of this fact (if hinting that there were usually lesser processors utilized in the players - if for other reasons) in magazine articles and reviews, but I never found one instance where any dvd player I ever owned, where that was not the case, either!
So, while I've not experimented with the latest codecs, and differing hookup options - pertaining to the latest Dolby Plus and DTS Master codecs - I'm not certain that things are so simple as to say that it should be equal sound and results, regardless of which hook up method you chose! As I said, my past experience, personally, has shown that there are, at the very least, factors to consider. And all things are not necessarily equal when it comes to processing, hook up, preamplification, etc. I guess what I'm saying is, is that I don't think it's just that straight foreward as is being implied here. I'd like to know from some review professionals, at the very least.
Anyone point me to a reveiw article or two? Perhaps have done some AB'ing of their own?

Quefee - Please read the rest of my post, including the title. The part you quote is about DECODING. It should be the same in both the receiver and the player. The next paragraph is about DACs. And the third is about post-processing.

Your statement "... it should be equal sound and results, regardless of which hook up method you chose" is not what I was saying at all. Decoding should be the same, although there are lots of other factors, including DACs and post-processing.

There are certainly DVD players and Blu-Ray players that have better DACs than some receivers. The DACs in high-end players (Cary, high-end Pioneer, Denon, dcs and others)are certainly better than in low-end receivers (Sony, Onkyo, etc.)

So I agree that is is a complicated issue. And I definitely believe it depends on the specific equipment you have. Everyone needs to consider all the options.