What is a home theater receiver and does it just control where the input is coming from?

An audio/Video receiver (AVR) will allow you to connect all of your audio video sources into it and have one connection to your display. An AVR is more than just an input switcher however. It handles amplification for the speakers and can add extra processing to audio and video. It will allow you to hook up 5, 6 or 7 speakers plus a subwoofer to get the ultimate home theater sound experience.

A HD capable receiver is not necessary but will pack more modern features, such as HD Audio decoders, good video upconversion and HDMI 1.3 support.

Video upconversion will take a lower definition signal and upscale it to a hd one the same as upconverting DVD players do.

HD Audio decoders only come into play when you have a Bluray player connected to your system that can output a HD bitstream to your AVR. Most Bluray players will decode the audio anyway so as long as the AVR supports LPCM over HDMI you're fine.

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Yes the TV can switch audio and video inputs - you don't need to get a receiver if you have amplified speakers to connect to the TV audio outputs.

If your speakers are NOT amplified, you will need to get a receiver.

A receiver switches inputs, amplifies and controls the volume.

Justr a normal receiver will work. It is not required to get a HD receiver. sound is not in HD. The Video is HD.