I think this is a very valid question and one I've debated. I think much depends on the original mastering that takes place. I can hear the difference from DD to DTS, but there are also DD soundtracks that sound better than DTS, not necessarily on the same movie, but with better dynamics. It also depends on the system, individual components, etc. Given the differences in DD to DTS, I'd have to believe the lossless or PCM formats would sound better across the board, with varying differences between movies and how the mixing is done in studio. I've listened to friend's systems and heard moderate differences, and I've just received a new Onkyo Pro unit to install. If it's not significant in my system, it'll be going back. The only reason for me to have a current generation processor is for the lossless audio formats, otherwise, I've been happy with my aging HTS 5.1.