I've done a bit of both, particularly with DVI switching. A couple of years ago, there was some often significant merit to recommending a straight source-to-display signal path for video - it is not hard to mess up video switching, especially if that switching allows any sort of OSD overlay. These days, though, it is less true - manufacturers have learned how to avoid introducing detectable deterioration if they choose to take some care in design. I've actually compared the 990's DVI switching to a direct source-to-display DVI connection, and my tests left me unable to detect any difference between the two arrangements. (The same is true, incidently, for the 990's component video switching as well.)

Here's one somewhat loosely related observation, though... I have switched from my HD cable box's DVI output to the box's component output as a result of some of my video switching testing. This is because the 990 offers a third component input (letting the cable box join the DVD recorder and the universal progressive scan DVD player in using component output to the TV) and because I ended up confirming some comments that I'd seen on AVS. It seems that - as of a year or two ago, when my Pace DC-550 was still new - cable set top box makers are still struggling to get DVI output to achieve its full potential. The result is that the component output actually looks a little better on HD material and basically the same on SD material. Newer generation boxes may have improved this, but the DC-550 is still the best box available in my area (my dad ended up with one just a month or so ago, even though the DC-550 was discontinued last year for the HDMI-based DC-551). If you have a set of component cables handy, you might do a little comparison with your box to see which you prefer.