The receiver needs enough ins and outs to cover all the home-theatre devices you have, or are likely to have in the near future. In general, the more you pay the more connections you get.
As you can see, the back of these receivers can look daunting, but you only need to connect the devices you have, so you can ignore the rest of the connectors. It's really just a matter of knowing which ones attach to what.
HDMI is a digital connection via a single cord that does everything for both sound and vision. It's very handy, provides excellent quality sound and vision, and saves clutter.
- However, both the receiver and the device connected via HDMI need to 'talk' to each other. Problems can occur if the HDMI standard is not implemented exactly. Also, HDMI includes a copy-protection component that can interfere with signals under some conditions.
Digital sound can be either via an optical (TOSLINK) or a coaxial cable, if you don't use HDMI. It doesn't matter which you use, so long as the receiver and the device to be attached have the same type of connector. Having both optical and coaxial connections is handy for attaching a new device in the future.
Analogue sound can be stereo or multi-channel depending on the connections available. Cheaper models may only have stereo analogue inputs. Multi-channel connections are only useful if you want to use your DVD or CDs on-board DAC (see Jargon buster).
Analogue video comes in three types: composite, s-video or component. The latter is the best quality and probably the one you'll want to use to connect your main video devices (DVD or set-top box), if you're not using HDMI. However, if you want to connect a DVD, set-top-box and VCR via component, you'll have to look around because most connection are via HDMI these days.
Cheaper receivers may only accept analogue video signals and pass them out to your screen. More expensive ones will accept both analogue and digital (HDMI) video inputs and then send them out via HDMI. They may even have up-scaling technology to increase the resolution of the video output to 720p or 1080p.