Yeah, it means the 5.1 comes from the DVD player integrated into the receiver. Some of those DVD integrated HTIB only have token analog inputs (red/white plugs), usually for the old CRT TVs that occasionally had analog outs so people could have surround sound from TV (or for VCRs and older cable boxes, etc.) ProLogic II will work to give surround sound. It's not as good as true DD 5.1, but in your system, you don't have much choice, other than upgrading it.
Don't believe everything on the Interwebz! A duck's quack DOES echo!