See that's where the weird thing comes in. It wont pass full 1080p, only 1080i, but it will pass the 24fps (and then the TV says 1080/24p). I'd use analog connections but 1, the PS3 doesn't have them, and 2, I can never seem to get the levels correct. Plus then I can't use THX and all that jazz. Right now I am just waiting for a reciever (preferably from Yamaha) that accepts 7.1 sound, passes 1080/24p and is THX certified. But that's a whole other topic. But here's what I've decided. If for some weird reason (like mine) you need to use 1080i but you can still use the 24fps, DO IT! When I shut it off, I got were shaky things on the TV, almost like the sharpness was jacked up.
As for the audio aspect. I can tell a difference between uncompressed/lossless and Dolby Digital, but normally it's only when you test them side by side. I figure if there's an uncompressed track I can use, I'd like to use it. But I have heard that coax/optical have enough bandwidth to pass uncompressed/lossless audio tracks, it's just there's no copy protection so the player prevents it.