Adding the PS3 to my HD system I noted that the HDTV only had 2 HDMI inputs and the PS3 would be the 3rd device connected. I initially connected and disconnected the PS3 and swapped it with the HD-DVD, but that became very tiresome and was afraid of damaging the connector.
I added a 3x1 HDMI switch to HDMI 1 of the HDTV and that allows me to connect up to 4 HDMI sources.
The HDMI switch automatically selects the source for me and shuts off when I turn off the HDTV. No picture degradations at all.
Now I can just sit back and enjoy the system.
Hope this helps.