it surprised me too that in the user guide for the illico HD PVR the first recommended connection is the 3 wire and not the HDMI for picture quality. I have not compared but one advantage of HDMI is (correct me if wrong) HDMi is bi-directional so the TV can negociate the best resolution and screen size setting with the PVR if it is set on auto.
I know how to set my TV on auto detect but not certain I have it right on the PVR yet.
Although the HDMI is bidirectional and although some devices can indeed communicate and provide an "optimum" resolution for the TV, the SA8300HD does not do this (I also don't like this feature on some devices since I prefer to set the settings myself, however, perhaps some people find it useful). See the following thread on proper setup of the STB:
I swear I can hear a slight improvement in the audio when using the HDMI over component cables with separate stereo audio cables, so I prefer using an HDMI. Plus I have picture noise and a scrolling line that is not evident with the digital connection. But the HDMI handshaking problem does return repeatably so I generally need to switch back to the analog connection. But oddly enough, the problem occurs only once in a while and mostly during American Idol.