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Originally Posted by
Ringfinger 
So, leaving it on PCM, I get the 5.1 or 7.1 stream converted by the player and sent to the receiver. I only have a 5.1 setup, so will the receiver adjust for that and send it only through the 5.1 channels?
Yes. Very few films have 7.1 soundtracks to begin with. They are mixed in 5.1 for theatrical release and most remain 5.1 for home release. If the disc is 7.1, the player or the receiver will do the required downmixing on 5.1 systems. No sound is lost.
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In my small mind, 5.1 sounds good, but when the receiver says DTS Master and all the lights are on, in my mind visually it sounds even better (the look not the actual sound). Are you saying that because the disk was 5.1 DTS MTR-HD, and the signal to the receiver says it was 5.1 PCM, that is the way it is meant to be heard? There is no better "sound" or "setting" I could be using? It is splitting it right and delivering it right, regardless if 200 lights light up on my receiver when it is set as Bitstream?
The only difference is in the lights, not the audio itself.

Movie soundtracks are recorded as multichannel PCM. But, PCM takes up a lot of space on a disc. TrueHD and dts-MA are really just different types of zip files used to save space. An encoded audio file cannot be "played" to produce sound. It has to be decoded first, turning it back into PCM. Lossless encoders compress (zip) the original PCM by removing some of the data. The decoders uncompress (unzip) the file, restoring everything that was taken out. You end up with the exact same PCM that you started with. It doesn't matter whether the compressed file is unzipped in the player or the receiver. It's still the same PCM, bit for bit, either way.
If there are differences, they occur after decoding and they are caused by limitations in specific equipment, not by anything inherent in the encode/decode process. Some receivers don't have enough horsepower to decode a lossless track and also perform other processing functions such as EQ or ProLogic IIx to expand 5.1 sources to 7.1 outputs. In those cases, it's better to decode in the player so that the receiver can use its limited processing power for other tasks. You get fewer lights on your AVR, but better sound from your speakers.
