late into this thread, but on Movies I use straight or straight enhanced.
This is on Blu-ray for %90 of my movies. I notice it sounds quite a bit better than direct. Now for music Direct is like night and day compared to any other mode. It sounds SO much better it blows my mind, and pisses me off because I can't use my sub in this mode. For all my media I use my PS3 w/ bitmapping 3 on and most of the time I use 176khz upconverting.
I'm using this avr w/ Klipsch Towers and a Velodyne sub.
2 ch room
Amp/DAC - Peachtree Nova 125
Speakers - Bowers and Wilkins CM6 S2 on B&W stands.
Amp/Dac NAD D 3020
Speakers Bowers and Wilkins DM601S3