The HDMI (high-definition multimedia interface) connector is currently the state of the art in home theater technology. It allows high-def digital video and multichannel digital audio to be sent over a single cable from an A/V source, through an A/V receiver, then onto an HDTV. Utilizing HDMI often results in a better picture on many HDTVs (vs. component video), and it's the preferred connection method for the latest generation of Blu-ray, HD-DVD, and upscaling DVD players.
Unfortunately, HDMI has been plagued by compatibility problems, especially when using cable and satellite boxes as sources. Moreover, there have been multiple iterations of the standard: HDMI 1.0 hit in December 2002, followed by 1.1 in May 2004, 1.2 in August 2005, and even 1.2a in December of 2005--each of which has added a smattering of features, some important, some obscure.
Enter HDMI version 1.3. The latest iteration of the standard is said to be the update that home theater enthusiasts have been waiting for. Among the highlights of HDMI 1.3 are increased bandwidth (10.2Gbps, more than enough to handle superhigh video and audio resolutions), "deep color" support (higher color bitdepth could result in a smoother HD image), and the ability to pass HD lossless audio formats (Dolby TrueHD and DTS-HD Master Audio).
In theory, that means devices that support HDMI 1.3 could deliver better HD images and more convenient use of surround sound. Whether or not that will translate to the real world remains to be seen. To date, the PlayStation 3 is the only device with HDMI 1.3 compatibility; other products--TVs, video players, and A/V receivers--are expected to begin shipping in 2007. Another big caveat: you'll likely need a "pure" HDMI 1.3 path from source to destination in order to fully enjoy any of the supposed benefits.
So, does that mean you should hold off on buying any new HDTV, video player, or A/V receiver until the HDMI 1.3-equipped models are available? Having not yet seen demos of HDMI 1.3, it's hard for us to say. But our gut feeling is that the difference between a 24-bit HDMI 1.1 high-def image and a 48-bit HDMI 1.3 image will be pretty hard for the average viewer to appreciate--or, at least, not nearly as noticeable a jump in quality as upgrading from standard-def to high-def. And if your primary high-def viewing source is cable or satellite TV, you'll need to wait until your provider can equip you with an HDMI 1.3-enabled set-top box before you could even enjoy the theoretical picture quality improvement anyway. In other words, we wouldn't put off the purchase of an HDTV just to wait for HDMI 1.3.
On the audio front, the question is a little more vague. The HDMI implementation on current A/V receivers leaves a lot to be desired, especially if you're trying to get the best possible audio from the latest crop of HD-DVD and Blu-ray players. The idea of an HDMI 1.3-enabled receiver with onboard Dolby Digital Plus, Dolby TrueHD, and DTS-HD Master Audio decoding would--again, theoretically--help simplify the situation. But the improvement in sound quality is likely to be appreciated only by discriminating audiophiles, and it will, presumably, require an HDMI 1.3-enabled player as well. Moreover, current Blu-ray/HD-DVD players and receivers can already access these better-sounding soundtracks--you just need to dive into the menus and toggle the correct settings on the player and the receiver (linear PCM output over HDMI).