Originally Posted by John Ballentine
Isn't Dolby TrueHD every bit as good as PCM? (both lossless formats)
Yes it is. Dolby THD is a lossless compressed audio stream that, theoretically, sounds just as good as a lossless uncompressed stream like PCM, but the bit depth is important. With Dolby THD, it saves space on the disc which directly maps to a lower bitrate for reading the audio track.
Think of it similar to having a large file on your computer that is 1GB. If you want to save space, you can compress it with a lossless compression program (zip, or many others) and maybe it will be 0.2GB in size. Later when you need it, you uncompress it back to its original 1GB. With a lossless compression/decompression algorithm, you have a bit-for-bit exact reproduction of the original (D-THD, DTS-HDMA). With a lossy compression/decompression algorithm, you have something kinda close to the original (DD, DD+, core DTS).
For the PS3 to output D-THD, make sure your output settings are for "PCM" and not "Bitstream". I think that if it is set to "bitstream", then a D-THD track comes out as DD.