You're using device mode and not using activity mode. When you setup your activities properly and press "Watch TV" as Birdman suggested, it will set everything up for you. At that point you're in the Watch TV activity and the buttons (both hard buttons and the LCD buttons) can be customized so that any button can control any device. e.g. The channel up/down, number and menu buttons control the cable box, the volume controls the A/V receiver and the LCD has buttons for TV picture control, etc.

Once you customize the activity buttons you should never have to leave activity mode for normal viewing.