HDMI 1.3 Audio Signal - Good Enough, or no?

I own an Arcam AVR350. As many know, this AVR, among a few others, eschews the HDMI connection for audio (providing switching for video only), citing it as a path largely inferior to other alternatives for truly quality audio reporoduction. Even with the introduction of HDMI 1.3, Arcam stands by the decision they made with respect to HDMI 1.1 and appears to have no plans to accommodate the HDMI audio path in the near future.

My question is whether most folks think that audio quality considerations in a home theater environment are important enough such that the HDMI 1.3 audio route would be "good enough" for HDTV and HD/Blue-Ray DVD. Or, is it really only a factor if you are using the AVR with both an HD cable/satellite receiver AND a high-quality audio source like SACD or DVD-A?
When Wes Philips (of Stereophile) watched a demo of an HD DVD with Dolby TrueHD soundtrack transmitted over HDMI 1.3 to a new Onkyo RECEIVER, he said it was the best surround sound he had ever heard.

YMMV, I suppose.

OTOH, you may get pretty close to that with uncompressed PCM over HDMI 1.1.
HDMI doesn't work with SACD I don't believe. But it is the only real way to pass the new hi-def audio soundtracks.
That's what I mean RW - meaning that NOT using HDMI may (or may not) be only important when you are using your AVR in conjunction with, say, an SACD. Also, whether having an AVR which CAN utilize the HDMI audio signal is really anything more than a convenience in using less cabling and whether a sacrifice in audio quaility, if any, is significant.
SACD, DVD-A, Dolby True-HD and dts MA are superb, lossless, multichannel, high resolution codecs via HDMI. Wes is right.

I think it really depends on the quality of your equipment. Currently only mid-fi companys have come out with the latest audio formats with the really high end companys still waiting in the wings, so I guess it would depend on your definition of quality.

I myself fall into the mid-fi group and am considering jumping into the foray with a unit from Integra. Everything I have read seams to indicate that the quality of sound for sacd and dvd-a really benefits from the new room EQ's that most new receivers come with. HDMI not only reduces the amount of cables but also reduces at least one d/a conversion for those of us who use bass management and/or EQ.

FWIW, dvd-a and sacd can be passed through hdmi depending on the player and proccessor. I think Arcam is missing the boat as more higher end units start using hdmi. As`Rwwear states, it is the only way to pass uncompressed pcm, Dolby Digital HD and DTS HD Master wich all can be superior to CD.
Another Wes Phillips vote. A'philes always try to find reasons why the old way is the best way, but said reasons are often nonsense.

Are "audio quality considerations in a home theater environment are important enough", well, I wath mainly concerts in 5.1, and can't wait to 1.3 is fully implemented to be able to watch these concerts in surround (as they should be), and in ultra high resolution, both audio and video.
I also recently bought an Arcam AVR 350

Mine will be used only as my HT setup - BLu Ray
I'm using a PS3 now, but will buy a Pioneer BDF05 (May release) which will output 7 discrete analog outputs with dac converters. THe new $2k Denon will do this also.

THe Arcam is a beautiful sounding unit, well above the mass marketed hdmi receivers. I'm using a Pioneer plasma and will send the BLu Ray video direct to the plasma and audio via analog outputs to the Arcam

you may be able to do your HD receiver with toslink

Arcam felt the hdmi inputs compromised the sound quality

I've heard there are major problems getting the hdmi 1.3 chips
Thanks to all, I think. ;) Keep in mind that this is not intended to be a vote for any "person". I was not taking a position either way but was, rather, seeking opinion, not setting up an argumentative scenario - unless one wants to "argue" with Arcam. I have been into high-end audio for decades but have only dabbled in HT. Personally, I think anything more than mid-fi is a real waste for movies and I am not sure that surround sound is how concerts "should" be reproduced (since it ain't surround sound or ultra high resolution at the venue). I will agree, however, that it may enhance the in-hime experience.

But, the DVD videos, and to a somewhat lesser but growing extent, concerts are improtant to my wife, I am trying to provide the best reproduction possible without going over board.
4yank -

I'm in a similar boat as I'm mostly doing the ht room to watch movies (dvd and blue ray) and will probably hook up satelitte (I'll switch from dish network which has less HD content).
I'm hoping the newest 7.1 / 5.1 analog out high end blu ray players have a stellar SD DVD upsample section.

my old main system 2 channel ht seemed good enough
but was ready and willing to play with multi
the Arcam had a pleasing analog element even if it doesn't have the latest hdmi elements

I hear thee, AT! I have a Zentih DVB318 with the firmware that allows upsampling to 1080i over component, and now I will be looking toward a Blue-Ray player as a replacement, as well.
I set up an Onkyo/OPPO Digital system for someone a few months back. The Oppo/Onkyo combo did pass SACD/DVD Audio over HDMI...from one, to the other. It sounded pretty darn good.

NHT Classic speaker, front and rear.

"Personally, I think anything more than mid-fi is a real waste for movies and I am not sure that surround sound is how concerts "should" be reproduced (since it ain't surround sound or ultra high resolution at the venue)."

Every concert is in surround sound - typically just for the ambiance of the hall, which is enough to make it mandatory. Can you imagine a concert withour hall reverb?

After that you have DVD's like Pnk Floyd where sounds come from everywhere (as in the real show) which are always attention getter's.
It depends on your needs. My HT stuff is totally separate from my 2-channel (to avoid pollution from noise or unauthorized users), so full HDMI convenience/codecs for movies is more important than the purest sound.

I have an AVR100 in a second system and I agree that the Arcam sound is hard to beat if you want it for pure 2-channel or multi-channel listening. I think that Arcam made a mistake in not supporting full HDMI. What would it really hurt to let the consumer decide? I probably would have stepped up for the AVR350 if they had included full HDMI.

Maybe it was a cost decision due to the fact that they don't turn out the volume of units that the mid-fi companies do.

So, if the system is for movies, I would go with a cheaper alternative that has hdmi 1.3.