HDMI Terms and Troubles...

Having been lured in and taken the bait from a sales person that assured me I would be able to "grow" with a particular Sony unit...I now refuse to buy anything Sony as it.'s build out is simply stupid, therefore all things Sony must be the same. Besides, I am not a fan of having any one particular format forced into my home (ie BlueRay).
In all honesty though, the Sony does everything it's "supposed" to do...and it does it well...I made an error in trusting a particular sales person.

My questions start with HDMI terms...in respect to "pass-through" and "decoding".
Am I correct in presuming that the term pass-though is exactly that and nothing more? No processing of any kind happens to the signal and whatever your source is, that's also what comes out to your display?
Whereas decoding actually takes the signal and enhances or corrects it according to your setup?

My problem is this...my Sony has 3 HDMI inputs and NONE of them will allow me to get the audio from that signal and go to the surrounds. I have to install additional audio cables from each source and essentially double my cable mess. I just want a simple clean look.
My home is modest by most standards (under 1K sqft) and my wife and I almost never go to theaters anymore, so we try to enjoy our movies the best we can. I am seeking guidance in selecting a new center-piece for my setup. I do not need DSPs or separates, or any of the like... Just a simple tuner/receiver 5.1 unit with about 100WPC+/-, perhaps with THX and at least 4 HDMI inputs that WILL allow audio extraction to the surrounds.
I have seen the ONKYO TXSR806 suggested here and there. Then someone said the "805" is/was a better unit???
Perhaps the 706 unit?
I would like to keep the budget right about 500.00 for this as my sister-inlaw owes me a bit less than that from last year...so I am x-mas shopping a little for myself.

Any and all suggestions in the right direction will be appreciated.

TIA,
Hillard