My setup:
I have the HDMI output (TV1) running to the TV in the master bedroom. It's was easier to run HDMI to the bedroom (1 cable) instead of 5 cables needed for component. This was a 50ft cable BTW.
The component for TV1 runs to the TV in the living room. Both TV's are getting HD from the receiver. Now I also have a S-Video (TV2) cable running to the TV in the living room. If we need to watch seperate programming on the both of the TV's at the same time, I switch the receiver to dual mode and switch the TV input in the living room to S-video. The picture is pretty crappy, but usually the kid's are watching it when it happens.
I don't remember how I did it, but I have two UHF remotes controlling the receiver, even when it is in dual mode. There's a thread on here telling you how to do that.