Most video switchers in receivers of this price range are going to degrade the signal. (I previously had a Denon reciever and it was worse than the Outlaw.) You probably have to pay a few thousand dollars to get video switching that does not degrade the signal.

The reason the Y-Connector gives you such a good picture is that it is a "hard-wire/mechanical" approach.

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Bruce Tiller
WT-46807 Toshiba SD-6200
Outlaw 1050 Receiver
My DVD list