Why do I need "Video" part of A/V receiver for home theater?

I'm looking for a receiver for my home theater system. I understand why I need Audio receiver but I can only find A/V receiver and not audio alone. For video, I can connect my DVD player, VCR etc directly to the TV and use a universal remote control. What's the benefit of having video receiver?

You don't.

Your direct-hookup scenario will work fine and may actually provide better video quality (as the signal has gone through less cable and switches). Many current TVs also allow picture settings to be optimized per-input, so using a receiver to do the video switching also defeats this advantage.

The main advantages of using the receiver to do the switching are in cable management: you can have one set of cables rather than 2 or 3 going to your TV. This is especially important with a wall-mounted flatscreen where a jumble of cables going up to the TV is unsightly. If done right it can also result in simpler remote operation.

I would estimate of the moderate-level A/V installations I've seen less than half actually use the receiver to do video switching. You don't "need" an Audio/Video receiver, but why wouldn't you buy one? It's not going to cost any more, plus it does offer some advantages.

Say you have a DVD player and a VHS player or a camera or all of these? You would have to have three separate video inputs on your television or unplug and reconnect cables every time you wanted to use one. Even if you had three television inputs (unlikely to be the same type), you'd have to switch the television mode. You'd also have to switch to the proper audio mode on the receiver.