In “auto” source mode, the video processor will cycle through Video1 -> Video2 -> Video3 -> Video1, etc., looking for valid video.  Once it locks onto a video source, it will continue using that input until video lock is lost.   
Automatic source selection will not identify S-Video or Component Video inputs.  If you connect either of these while in Auto mode the video processor will lock onto the base video signal on Video1 and display a black-and-white picture.