As I understood the OP, this discussion relates to qualitative advantage of bitstreaming audio data out of a player vs. decoding to PCM internal to the player. Referencing the quotes thebland lifted above...
1) Decoded you don't need HDMI 1.3.
Not germane to this discussion. HDMI 1.1 or 1.3 have no affect on audio quality. The point being made by Mr. Peterson is merely that someone with HDMI 1.1 hardware doesn't have to change hardware. This could only be construed as an "advantage" for in-player decoding assuming one, a) does not already have HDMI 1.3 hardware or, b) is not disposed to updating hardware.
2) Decoded the PrePro has more compute cycles for audio enhancements.
This would require more detailed input from an engineer. There is more likely to be greater computational resources, particularly hardware resources, dedicated to both audio decoding and processing in a, say, $1500 to $5000 AV receiver or pre/pro than a Blu-ray player.
3) Decoded the source can mix in audio commentary and other features. This is not possible if the source does not decode these formats.
See above. This is a convenience feature and has nothing to do with the quality of the decoded audio, except to possibly add a step where degradation could occur.
All things being equal, LPCM has a small advantage..
If you are saying in-player decoding and sending PCM to the receiver/processor has a small advantage over bitstreaming, then I disagree. And, unlike you, bland, I have both capabilities in my system and have been able to actually compare both configurations as the basis for my opinion.
Saying that the decoded output of a TrueHD or DTS Master audio track is the same no matter if that decoding is done in a player and sent out as PCM or done in a receiver completely ignores the simple fact that the decoded PCM data in a player then has to be sent out of that player using a less than perfect physical medium that covers inches/feet of copper and connectors rather than nanometers of circuitry on a chip and into a receiver where is still has to follow a digital processing path that may well be different from the path taken by the raw bitstream data. Sure, digital is digital, but how that digital data is handled up to and through the analog conversion is not the same.