Home Theater guys please help me

Not enough information. Reading your description, it sounds like he might have given you the HT because it is failing. To test this, do you have other equipment such as a DVD or BD player you could plug into HDMI 1 or 3 and see if the HT will lock to their signals when you select either of them? I'm assuming you hooked maybe your TV to one of those ports (if not- if nothing was attached to them and you were selecting them- maybe the HT just moves on to the next port when there is no signal). Can you rule out a bad HDMI cable by swapping out one and testing again?

It jumping to AUX sounds could be that it's not seeing a signal at HDMI 1 or 3 and is thus just jumping to the next available source. Maybe AUX is some kind of default.

If you can hook some other HDMI device up to 1 or 3 and it won't lock to them either (when you select the one to which you hook a DVD, BD or similar), it adds fuel to the guess that the HT was a giveaway because it's failing. If you don't have a DVD or BD player with HDMI, check with friends & family and see if you can borrow one just to test.

As to controlling it with another Panasonic (viera) remote, no surprise there. You could buy a universal remote and program it for Panasonic and it could be the HT remote too.

One other option: maybe you just need to do a big "setup" routine, which would be a menu option. Hook everything up as you want it, make sure it's all turned on and then find Setup or Program in the HTs menu system. Let it run and then try HDMI 1 and/or 3 again.

Have you worked through the manual? It can be downloaded from here: http://shop.panasonic.com/shop/model/SC-XH170?t=manuals

Maybe contact the friend and see if he can confirm that some ports didn't work for them? Maybe they set up the system with custom settings that need to be reset for your different hookups?

Good luck.