Also, what application do you use to play your media?
That's important because some applications can decode the Dolby Digital stream from media (DVD, etc.) just fine, but will only present PCM to the outside world. Other applications will pass the stream right on through to the output. Could also be a setting in the app somewhere. For example, iTunes decodes DD, but will only send PCM to the outside world. VLC decodes DD too, and by default outputs PCM to the outside, but has an option to output the raw media stream to the outside world so you can decode in the AVR. Some applications have the option to send multi-channel PCM out too, and that's fine but your AVR would display the fact that it's getting multichannel PCM. If it's getting two-channel PCM, it's going to drop back to PLIIx or the like, not optimal.
The actual media matters much less than the application you're using.