When playing Blurays thru Playstation 3 my reciever says PCM

Depends on the receiver but I wouldn't worry - you just need to check your settings on the PS3 based on the guide here to ensure it's set up right.

That is correct. The PS3 does all the processing for you and outputs PCM to your receiver. Your receiver has to do no work basically and just outputs what it gives it, from what I understand. This is what mine says as well (Onkyo 606). You can go into the audio section of the ps3 and it will tell you exactly what it will output.

A technicality mostly.

One is Linear Pulse Code Modulation - the other? Drop the Linear.
The two terms are used interchangeably although they differ in their implementation. You can read more about LPCM and PCM if you like.

Boring stuff really. As long as the right light blinks on everyone is happy.

PCM is pulse code modulation. It's kind of a misnomer, IMO. All it means is that the audio is represented as a bunch of samples.

L means linear. Linear basically says that a change in sample value represents a constant change in what the sample value represents. So if you think of samples as representing voltage, and if a change of 8000 represents 1 volt, than a change of 16000 represents 2 volts.

I believe this is the standard method used on CDs and WAV files.

I am actually not familiar with any NON linear PCM system. If anyone knows of one, let me know. I would be curious to read about it.

Oh, and it's not boring - at least not to me

yes. the receiver is just not decoding it.

Yeah I know. I dabble in these things - scratch the surface - you seem to emerge yourself in it.

Just don't get bogged in the details.

I love AV. I read up on all aspects of it. I don't obsess about the details, I just study them

It's a hobby