How is your audio set up?

Do you have a "digital out" or "Dolby Digital" or "AC3" setting or anything like that on your sound card/GPU? It may only be set to send stereo PCM as a default because it doesn't know what you are going to connect it to. There should be either an on/off to send the bitstream of the audio instead. I wish I could be more help, but I'm on a Mac so the dialog boxes won't be the same.

Generally when gaming and using HDMI from the GPU you will get 5.1 PCM out. Sounds great, no need to fret over not seeing the DD or DTS light on your AVR. Just use the standard windows sound config tool to set it up, its super easy.

Im not sure about GeForce cards but ATI has a setting in the video card to send audio decompressed over the HDMI.

You shouldn't expect to get a DTS or DD signal. The audio device does not do dolby digital live or dts connect, so you will be getting a raw PCM signal rather then a dolby signa. This is good though, it means your audio is not being compressed to send to the receiver.

You may not be configured right on your receiver. See if there is a "Direct" mode or something along that lines and try that. It will turn off any post-processing on the audio and would hopefully get you out of Neo 6 mode.

I've been using crap computer speakers for gaming but now that I got a new ysp 2200 that has virtual 7.1 and truehd I'm wondering if I should get a sound card. Running mobo is gigabyte z68 up3

DD or DTS should stream natively from content that has it, but games use discrete channels, few use DD or DTS. Over HDMI I believe your system should be sending 5.1 in its native format. I saw another poster say this, try setting your receiver to its AUTO mode for that input or cycle through to see if it has a "SOURCE DIRECT" or some other mode.

Of course, you also have to make sure Windows is set to output digitally through the HDMI port and make sure its not forcing some kind of format on its own and just passing PCM natively (make sure its not set to just stereo, etc).

Back in the day, you used to have to get a sound card that had Dolby Digital Live for on-the-fly conversion of PC game surround audio, or you had to output the 3.5mm jacks to RCA cables and run them directly into the analog 5.1 inputs on stereos to get your game surround.

Or, you just cheaped out and ran digital to digital over optical/coax and turned on Dolby Pro Logic IIx

I still use analog for my setup. Normally I love everything digital but I've always though analog sounded best on my PC. I'm currently using the razer Tiamat 7.1's and have to admit, they are pretty damn good! I'm also running the edifier S500's and they do a great job with my Forte 7.1.

YOu want to set pc audio in control panel to 5.1 channels or 7.1 whatever you have. Then on your onkyo like headrusch said you're in the wrong sound field. Cycle through until the onkyo says multich that's when you'll know when you have it all set right.