I am using a PS3 to play blu-rays via HDMI to my LN46B650 samsung. If I get a receiver/HTIB that is 5.1 and supports True HD what will happen in this situation:

I put in nightmare before christmas which has 7.1 True HD and 5.1 DD tracks.

Will I get the True HD track (but only in 5.1) or will I get the 5.1 DD?

What would also happen in the reverse if I had a 7.1 receiver that supported True HD and the Blu-ray only had 5.1 True HD?

Or does this all depend on the reciever. I am looking at the following HTIB:
YHT-591 and the YHT-791

Thanks ahead of time, I am new to most of the audio stuff.

With a PS3 you pass MPCM to the receiver, so the PS3 does the decoding. I'm not sure whether you set the PS3 up for 5.1 playback or not. Or whether you simply pass the 7.1 MPCM to the receiver and then the receiver, being configured for 5.1, downmixes the 4 surround channels to 2 channels. Either way, though, you will be able to listen to the TrueHD tracks but with the surround channels downmixed to 2 channels instead of 4.

As far as having a 5.1 track but a 7.1 setup, what particular receivers are able to do varies a little bit. Dolby PLIIx is probably the best way to matrix the 2 additional surround channels. But some receivers cannot apply DPLIIx to 5.1 MPCM; only bitstream.

Yes, it depends on the receiver as to what is done with the incoming signal. I have the Onkyo HT-S6100. Being a true 7.1 HTiB, it will faithfully render the 7.1 formats, and, when set to Dolby PLIIx, will matrix the 2 surround channels of 5.1 to 4 surround channels for 7.1 sound. Or, you have the option of leaving 5.1 sound as is. Also, you can even set it up for only 5.1 sound, and it format all incoming signals to 5.1 instead of 7.1 . This Onkyo is one awesome system ( probably why it is often out of stock at most retailers ). I'm not sure about the Yamahas you mentioned, as to what they are capable of doing.

Will I get the True HD track (but only in 5.1) or will I get the 5.1 DD?The former. At the core of a 7.1 TrueHD track is a lossless 5.1 mix (all the content in fewer channels). This part of the soundtrack will be decoded by your PS3 and sent to your 5.1 set-up, no need to downmix. What would also happen in the reverse if I had a 7.1 receiver that supported True HD and the Blu-ray only had 5.1 True HD?
As others have mentioned, you can use processing such as PLIIx to map a 5.1 soundtrack to 7.1 speakers. No need to do anything for the fronts: 3 channels, 3 speakers; nothing to process. All the processing happens in the surround field, where 2 surround channels are split to 4 surround speakers. Sounds that are more stereo (mostly in the left OR right surround channel) will be sent to the speakers at your left or right side. Sounds that are more mono (fairly equal in the left AND right surround channels) will be sent to the speakers behind you. That's where those sounds would have phantom imaged anyway. I am new to most of the audio stuff.Then you're in luck, because you have very little to worry about. Modern receivers can scale the number of channels in the source material to match the number of speakers in your set-up. For example: 2-channel sources can be upmixed and 7.1-channel soundtracks can be downmixed to be compatible with a 5.1-speaker system. During initial setup of your gear, just dial in however many speakers you have and your receiver will take care of the rest (often automatically).

Thank you guys so much, you all cleared it up for me. I really appreciate it :)