I believe I got the PQLS all straighten out today. Here is what I did in order to work with the SC-07.
In the setting of the 62FD, I went to the Digital Output and set it to OFF. There are options for Bitstream, PCM, Reencode and OFF. I tried all the other 3 options (Bitstream, PCM, Reencode) but it did not work correctly with the SC-07. Also with the other three options (Bitstream, PCM, Reencode), I was hearing a static or popping sounds coming out of the speakers. So when I picked the option to turn OFF, everything now is all good.
In the HDMI Audio Out, I changed the option to Bitstream for watching blu-ray movies with DTS-HD Master Audio and Dolby TrueHD sound track.
I was confused between the Digital Output and the HDMI Audio Output. The owner's manual got me confused because the Digital Output is to control the Audio for playing CD and SACD discs.
And the HDMI Audio Output is to control the Audio for the blu-ray and DVD discs.
The sad part about all the time I spent on the PQLS is that the sound quality for music did not sound any different. I thought the 62FD sounds better if I turn OFF the PQLS feature. Since the SC-07 got a really fantastic DAC and an outstanding ICE Amp, I think it is best to let the SC-07 do all the work and turn OFF the PQLS.
I should mention that when I listen to music, I use the PURE DIRECT mode with the SC-07. The PURE DIRECT mode will give you the 2 Channel music experience without the subwoofer. Just the pure enjoyment of the Left and Right speaker.
To get into the PURE DIRECT mode for the SC-07, on the remote, press the button PGM which is located at the bottom left corner. Keep pressing the button several times until you see the PURE DIRECT on the LCD screen of the SC-07.
I think instead of Pioneer adding the PQLS feature for this player, they should add the Pure Direct button on the front of this player. I think the PQLS feature is just a gimmicky feature.
Edited by mantaraydesign - 10/8/13 at 8:45am