Also I dont want to have to turn on the receiver to watch TV. If all my hdmi signals are going through the Onkyo does it have to be on to watch basic TV?
If you hook all your sources (bluray, satellite, etc.) up to the Onkyo first, then yes the Onkyo has to be powered on to be able see them on the TV.
However, if you wanted, you could hook up all your HDMI sources directly to the TV and then use the digital optical output of the TV to send the audio to your Onkyo. Heck, you could do this same thing using the B&K 507. This way, the Onkyo or 507 does not have to be powered on to watch TV. However, you will have degraded sound quality when watching bluray audio as anything on the digital optical output is down-converted to "old-school" dolby digital or DTS. You will NOT be able to truly play the hi-res bluray audio formats (such as TrueHD or DTA-HD MA). Satellite broadcast is usually highly compressed dolby digital, so it won't matter much there. Another thing to think about is the "digital optical" interface is not going to sound as good as a "digital coax" or even an HDMI interface.