ETA? I'd rather not stick my foot in my mouth again.
Dialogue Normalization, Dynamic Range Control, and Downmixing are all separate DD metadata influenced parameters. They can influence one another, but Dialnorm is not effected by anything else. When engaging a Downmix DRC is affected, but not Dialnorm.
Dialnorm is supposed
to be used normalize average volume from program to program. In movies this is mostly the dialogue, in say broadcast TV it is the average A-weighted loudness. IE, the loudness of people talking on a DD track in Click should
be the same as Half Baked, or an HD NFL game. (notice the highlighted words.)
Dialnorm is indicated by a number from -31db to 0db at the encoder level. This number is chosen by where the average levels are at on a sound track. Bare with me a minute. Now the highest "volume" coded on a DD track is 0db. When played on say, the center channel you should get 105db on an SPL meter at your seat. This means -31db on the track plays back at 74db. A disk with a dialnorm of -31db has nothing done to it. (the ARV will say +4db, I'll get to this in a minute.) Now lets say you have a track with a normalized level of -21db. The DD decoder (AVR) will "turn down" everything by -10db to match the loudness to the chosen -31db level.
Now Dolby set the the default levels for home equipment as -27db. This is why you get +4db on you AVR with a -31db dialnorm, and nothing indicated at -27db. They wanted the option of boosting a track if one needed it. This is going to screw a few brains, but nothing is being done to the signal when it says +4db, and at anything other than than that the volume is being decreased. This is why it is said that DTS is 4db hotter than DD. It really isn't. Most DD disks are just retarded a few dbs by default.
This is why I am going with -31db. This will set the correct max setting for DD and DTS. It's really no big deal, just preference.
Disclaimer-This is not gospel, just something I threw together off the top of my head at work. Check out Dolbys site for the real run down.