Good questions.

Firt, I haven't tried it, but I'm pretty certain that the 990's DVI switching will handle 1080p (no reason that it shouldn't considering the way they are handling DVI switching). Outlaw tech support could verify.

The salesman was oversimplifying (and not very accurately, at that). First, component video theoretically can do 1080p, but the implementations generally cap out at 1080i. No TV's I know of accept 1080p over component, although some will via VGA. Blu-ray, HD-DVD, and upscaling DVD players typically cannot output 1080p over component - they cap out at 1080i. HDTV broadcast standards do not even include 1080p (the two standards are 1080i and 720p, with a bunch of other options in there that nobody ever elected to use). In cases where you have a true 1080p source (basically just Blu-ray), the component output can do 720 or 1080i, and you can select which in the player based on which you prefer (I'd go with 1080i if I had a 1080i TV and 720p if I had a 720p or 768P TV - if you have a 1080p TV, you shouldn't be using component in the first place as you will have HDMI available). The 990 doesn't scale or deinterlace, so it isn't equipped to change a signal's resolution. If you actually have a source that produces 1080p over component (the XBox360 is the best example I can think of), the 990 won't deinterlace it to 1080i or scale it down to 720p - but its component switching wasn't designed for that much signal bandwidth, so I don't know how well it would pass the signal.

When pairing the 990 with a Blu-ray player, you need to understand what Blu-ray offers as far as audio. (My HDMI FAQ might be helpful in this regard - see my sig.) There is Dolby Digital Plus (which is almost never used), Dolby TrueHD, DTS-HD, and multichannel PCM ( pulse-code modulation ). PCM is the digital audio format we've been using for CD's for decades now, but they've simply upped the sampling rate and gone from two channels to as many as eight. The only connection into the 990 that supports these new formats is the 7.1 analog input, because the coaxial and optical formats don't have enough bandwidth. Coaxial and optical will still work fine for DVD and CD, but all they will deliver with Blu-rays that include the new formats is a "core" Dolby Digital or DTS track. You will need a player that can decode the new formats (TrueHD, DTS-HD High Resolution, DTS-HD Master Audio) and output them as multichannel analog. The immediate candidates for this are the Panasonic BD55 and Sony S550. Both offer all of the required decoding and 7.1 analog output. There are also a number of us who are waiting for OPPO Digital's BDP-83, which will likely arrive in a couple of months. Of course, if you won't have a 7.1 speaker setup, a player with 5.1 analog output would work just fine.