On screen menu's, internal HQ video scaler, convenience, ease of wires in walls, no noted signal degration....do I need to go on? I am a purist and run direct wires but I can see why some circumstances other options would be better.
trick is to bypass the processor if you have better chips in your players or your display
biggest problem i have found with the in-processor chips is that they are global - one size fits all meaning that all of your sources are processed identically - obviously BluRay and DirectTV don't have the same needs.
Beyond that I totally agree with the other posters. Its just a lot more elegant way to cable your system. Run everything to the processor then one cable to the display. Can be a biggie if you have a long run from the sources to something like a ceiling mount projector.
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