How should devices be configured so that they do not power cycle when switching between activities?
Turning off a device when changing Activities is a function of the Power Device setting in an Activity. If you don’t want that to happen, the device should not be set as a Power Device.
So…if I have a tv, receiver, DVD player and cable box and I start the watch cable activity and then switch to watch dvd, roomie will know that the tv and receiver are already on and bypass the power commands?
The answer to that depends on a lot of factors but if your devices were for instance all power toggle devices via infrared then that would be true assuming that the Track Toggled Power option were on for each.