the hard buttons are fixed, the soft buttons are on the LCD screen and can be changed. For both types of buttons you can assign any command from any device to it for any activity. I'm not sure how to say it more clearly than that.
By the way, I just got Verizon FiOS... should I connect the set top box from Verizon to the AVR via HDMI or is it better to use optical? Currently I am using HDMI- is that the best way?
in a perfect world you just use HDMI for everything, but cable/sat boxes are notorious for having HDMI "handshake" problems. In that case, it is easiest to just go HDMI straight to the display for video and run optical for audio... but try HDMI first and see how it goes.
Should I select stereo or sound for default audio output on my fios settings page? My fios STB connects via HDMI to my Denon 2310 receiver... when I tried both settings, I still get Dolby Digital on my AVR screen. Is one preferred? I, of course, want surround sound, where available, otherwise Dolby Pro Logic...
if you are getting Dolby Digital you are good to go. Not every channel will be 5.1, sometimes you will get 2ch stereo signals in whcih case the receiver should kick into Dolby PLII Cinema mode and "simulate" the 5.1 audio.