does hdmi handle audio well?

I think HDMI has the potential to transmit audio just fine. My Integra DTC 9.8 works well in decoding HDMI audio. Most pre/pro's provide the option of both HDMI and multi-channel analog inputs; why not try both and see which sounds better to you? HDMI clearly has the advantage in using fewer cables, and as an all-digital solution offers better opportunities to using room correction, as you alluded to.

Michael

In my opinion, if higher end manufacturers are staying away from it, it is because of the technical complexities of investing in new technology; although, with names like Classe, Halcro, and Mark Levinson developing for HDMI nowadays, it's pretty hard to make that statement.

HDMI isn't necessary if you could get past:
1. Using the DAC's in the Oppo player
2. Using speaker distance correction and crossovers in the Oppo or external analog crossovers (like Outlaw ICBM-1)
3. Losing THX post-processing capacities and room correction

There are no other major differences. I came to the conclusion that, by avoiding HDMI, the pre/pro arena becomes much larger in selection. Also, analog components will never become obsolete so long as DAC's are continued to be made.

But if you're interested in HDMI, consider the Cary 11A and the NAD M15HD that will be coming out shortly.

Sufentani -
Your integra is on my short list for sure. But it had been suggested to me that it isnt up to our standards as a 2ch analog pre. What is your experience with it in this area? One of my ultimate goals is to find a single pre that I can live with for 2ch and htr.

R - You are right of course. Classe and many others are starting to offer hdmi in thier newer models. But they are definatly showing up later to the party and I suspect that your comments on the costs of investing in new technologies have a lot to do with it. As you point out, if I can get around hdmi for audio, and I get my video processing somewhere else, the list of quality pre/pros at reasonable costs gets much longer.
A follow up question though - I know that I can live w/o the room correctino just fine (not using it now as a matter of fact) but I am curious about the thx post processing that you are talking about. Could you elaborate? I am not looking for a pre/pro that is completely analog, just one that does not have hdmi. Most seem to have digital input of some kind, either optical or coax that would allow me to send a digital signal. I would think that this would be the audio connection that i would use for cable and regular dvds.

Their are huge licensing fees to be paid for the needed pieces to make HDMI work with all the new codecs. I have wondered if this isn't why Mark Levinson only made their pre/pro HDMI 1.1 (can only handle LPCM not bitstream)

One you guys missed is Krell! I have the Evo 707 and it is insanely good, yep it costs more than many cars but it is much more enjoyable and I know they just released it's little brother the S1200.