Help with system upgrade – HDMI 1.3 Needed?

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    I am starting to seriously look at upgrading my HTPC to handle Hi-Def.  My current system is:

    Zalman HD-160 HTPC Case (full size boards fit perfectly)
    SATA 2 160 GB HDD (I do not copy movies to HDD, and store MP3 on networked server)
    P4 2.66 CPU
    1 GB RAM
    Avermedia MCE 250
    AGP GeForce 6800GT OC by BFG
    PCI Hercules GameTheatre XP 7.1 with external breakout box
    MCE 2005
    MCE Remote and extender

    From wall to cable box – HTPC – Pioneer Amp/Tuner (6.1 surround sound) – Sony WEGA 34 in digital tv (letterbox style tv).

    The parts were left over from when I built my new gaming rig, and used as an experiment into HTPC.  Turns out my wife is so happy I built it my sex life improved!

    So, with HD on the horizon, I need to upgrade.

    I would like to use HDMI 1.3, naturally, but am not sure if it is actually needed.  If the new ATI cards do as planned, they will have HDMI out, but have been told to expect ver 1.2.  They are rumored to handle almost all the conversion in the GPU, and will have AGP cards available.

    Any help with recommended upgrades would be appreciated, with replacing as little parts as possible, as the more money spent the lower the WAF becomes.

    I plan to replace the TV, not sure with what yet.  Current plans are to go from HTPC via HDMI (both audio and video) to the TV and pass the video from the TV to the amp/receiver (which can take both digital coax and digital optical).  I would no longer need the sound card at that point.

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