2) LFE (.1 channel) is it's own unique bass channel and the track is NOT contained in or duplicated from the front mains.
Edited by CouchPotato69 - 6/26/12 at 8:30pm
Statement 1 is incorrect.
Statement 2 is correct some of the time.
You are confusing the terms but you are not alone as most/many AVR manufacturers do that, too. The LFE channel, per se, does not contain rerouted LF from the other channels.
The output from the AVR (or processor) is correctly labeled as "subwoofer" (not LFE) because it can supply (1) just LFE information, (2) just LF content from the other channels (e.g., if you are playing a CD) or (3) both.