okay guys, let me set this straight:
When you set up your TV and audio reciever, there are some diagrams that you see in the Setup wizard....
The first, shows you plugging the HDMI/DVI/Component/whatever outputs for HD directly into your TV, and connecting the audio to either your TV or reciever...
the second, shows connecting the analogue outputs on your cable box (S-Video, and the Stereo L/R audio), to one of your tuners.
What happens, when you use the LiveTV (cablebox), the tuner displays on screen.
If you select Direct AV, the TV switches its inputs, and the reciever switches its inputs, and makes it so that the HD signals directly from the cable box are used. And any keypresses on the remote, are sent to the cable box.
So, you have two sets of cables running... one high definition set that directly connects TV, Reciever, Cable Box...and the SD streaming set, which connect to the tuner card.