5 channel stereo is not a good way to process audio for surround sound. It takes a stereo signal and sends the L/R signals to all the speakers, meaning dialog that should be up front in the center speaker comes out everywhere, including from the surrounds. It's fine for background sound at parties, but not much else. There are better surround modes to use.
You want to turn off 5 channel stereo and use the Standard or PLII surround modes on the Denon. If properly set, your HD DVD player should output DD 5.1, DD+, and TrueHD. The satellite box should output DD 5.1 on many channels and stereo PCM on others. The Standard mode lets those sources play just the way they were mixed. If you want to expand the stereo sources from the set top box to all your speakers, you should use PLII instead of 5 channel stereo. The PLII surround mode does nothing when the source sends a 5.1 source, such as DD 5.1, and it intelligently expands stereo sources to 5.1. By intelligently, I mean it puts dialog in the center channel and appropriately reroutes sounds to the surrounds.
Edited by BIslander - 6/12/12 at 9:29pm