The question of DVI versus HDMI is complex, often discussed, and without a single correct answer. Here's the best summary I can come up with, which will hopefully help you with your decision.
The 990's DVI switching will pass HDMI video without any degradation or compatibility issue. It is HDCP-compliant, will pass HDMI blacker-than-black, and is as transparent to the signal path as any HDMI switcher I know of. That includes resolutions up to 1080p - from what I've read, DVI is actually as capable as or more capable than HDMI at passing 1080p signals (once you have both a source and a display that will exchange 1080p, which will be true in the near future but is currently not possible).
What about audio? Well, if you've got a 990 in the system you don't care about having HDMI audio make it to the display (the 990 has to be on for its switching to work, at which point you'll be using it for the audio rather than the two little speakers in your TV). You still have to get the audio from the source to the 990, though. The Toshiba HD-DVD players allow you to do this by either converting Dolby Digital Plus to DTS over coaxial or optical (not an approach that warms my heart, but one that offers the simplicity of one audio cable) or decoding Dolby Digital Plus internally and outputting it in analog form to the 990's 7.1 analog input. Blu-ray players will do the same. Eventually, the source players and software for both formats will hopefully make full use of all three new audio formats (Dolby Digital Plus, Dolby TrueHD, and DTS-HD), at which point players will support all three via multichannel analog. This will be true of nearly all players - the only exceptions I know of will be the PS3's Blu-ray support and probably the Xbox360's HD-DVD add-on.