I believe I've got the 360 design down. No problem.

With the Yam 7.1, 2 Pio plasmas, 2 DVR's, 2 XBox's, DVD and an MX 850 in the room, most likely they will want these scenarios side by side:

DVR1 and DVR2 (one for each TV, sound from either)
DVR1 and XBox2 (sound from either)
XBox1 and DVR2 (depending on what they fired up first - not essential)
XBox1 and XBox2 (sound from either + headsets)
DVD and XBox2 (this is impractical but it's a kids room - so why not?)
DVD and DVR2 ( " )

DVR1, XBox1 & DVD will be routed thru the Receiver to TV-1, DVR2 & XBox2 video will connect directly to TV2, audio will connect directly to audio only inputs of receiver so picture won't switch on TV1 when selected.

I've done several 2 and 3 TV systems that work great (minus the game).

I'll use a Yam RX-V659 or the RX-V1600. The 659 is a more desireable choice because of the integrated Ipod dock.

I've never used a matrix switcher. As I understand it, it only gives you the option of swapping screens over this more conventional design.

Any thoughts or concerns you guys might have?