In's always go to Out's.
The VR207 has no component video inputs, just a composite video output so you can use your TV for the receiver's On Screen Display.
http://www.kenwoodusa.com/UserFiles/File/UnitedStates/Home/Manuals/vr207.pdf
Just run your BluRay and Cable box HiDef HDMI, component, s-video, composite video, whatever (in that order of preference) to a matching input on your TV or monitor.
As a rule you should run the best audio from each of your video sources to the VR. There is no compelling reason to ever send good audio or video to a device that has little (or no) use for it.
Unfortunately, the VR207 has no digital audio inputs, so the best it can muster regarding surround is Dolby Pro Logic derived from 2-channel inputs.
BUT, if you have a DVD, BLURAY player or cable Box with 5.1 analog outputs you can let their internal circuitry decode Dolby Digital programming to true 5.1 for input ("DVD/6CH") to the VR207.
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