To me, video switching is more trouble than it's worth unless the receiver is capable of converting between all interfaces. I have a Hi-Fi VCR with composite only connections, a DSS reciever with composite and S-video outputs, a DVD player with composite, S-video and component outputs, and a tv with all of the above inputs. If the A/V receiver can't up-convert composite and S-video into component, I still have to use multiple inputs on the tv.
So, my suggestion would be to make a receiver with NO video switching and either pass the savings along to the customer or put it into better audio/surround sound.
As a complimentary component, design a video switching/conversion box to which all video sources would be connected and converted to any other video format for connection to the video monitor. This component should be IR controlled by the receiver remote and programmed such that choosing "Source 1" on the receiver simultaneously connects the "Video 1" input to the monitor.
So for those people who have a tv with sufficient video inputs, they don't have to pay for the video switching in the receiver. And for those that want the video switching, they can buy the external, high quality, video switching and conversion box which would functionally integrate with the receiver. There might even be some quality pay-offs by separating the the high-power components in the receiver and the high-frequency, more interference-prone video section.
Matt
PS Do we get any royalties for marketable suggestions?