Try hooking the NRS directly to the BenQ projector. Use the info section to determine what is being sent by the NRS. The fact that you had a picture when you hooked up to a monitor means the NRS is working. We just need to find out why it does not play nice with the Onkyo.

Hi bguzman and thank you for caring!

I did as you said. It seems you're spot on and I was wrong: The signal received by the projector (which handles it fine btw) is 1366x768 @ 59 Hz. That's higher than regular 720p (1280×720) if I'm not wrong. From what I've read that's the typical "HD ready" resolution.
It still seems strange to me that the Onkyo shouldn't be able to process the video signal since 1366x768 was quite a common display resolution during the transition period before 1080p.
Do you have any other ideas based on that information?

Well after taking another look at the Onkyo 906 manual it does not support that resolution on any input.
As I see it you have three options:
1. Connect the NRS directly to the BenQ
2. Connect your LD player via composite or S-Video to the Onkyo and let the HQV processing upscale the video.
3. Buy a video processor to convert the NRS signal to one that the Onkyo can handle.

I would spend some time with the first two and see if you can "live" with either one of those options. I have used an Onkyo 707 before and it did a pretty good job wit LD.

Oh well, that's a bummer Thanks for your input anyway.
Where did you find that information? I looked the manual through several times before posting here and couldn't find anything. Besides, why is the Onkyo accepting the signal over HDMI (via VGA->HDMI adaptor) but not over component? The resolution is not altered by the adaptor since the projector still shows a 1366x768@59Hz input. That's rather strange, isn't it?

Considering your suggestions I guess I'll have to leave it at sending the picture through the video processor. While the Onkyo did indeed a hell of a job smoothing out the picture, I simply prefer the more natural, analogue look from the video processor. And buying yet another piece of equipment is out of the question right now.

Thank you so much for taking the time to help a noob out!
Best regards.

I prefer the "look" of the NRS as well out of all the equipment I have tried. I found the 906's resolutions on page 147 of the manual. It did not list your resolution. Why it works with HDMI ?
I leave the LD signal at 720p and use component for two main reasons. First it has a more analog look than if I scale it up to 1080p and use HDMI and second there is much more flexibility with an analog signal than there is with HDMI. Glad I could help, sort of.