Hi New2,
Something here is confusing:
"Last night I decided to set the cable STB to output 2 channel only (PCM) and all of the sudden my speakers came to life. Sound is much more clear and real sounding and the surround effects were much better."
You said you were now running 2-channel stereo. Do you mean that the surround effects heard through the two stereo speakers "came to life"?
As to the other questions, perhaps your set-top box is not doing the Dolby 2-channel mixdown from DD 5.1. Did you check the STB menu?
Dolby Digital is a compression algorithm, so a lot of data is thrown away compared with PCM. However, it's normally quite transparent; you might hear a few subtle differences from PCM and a 2-channel Dolby Digital feed, but it should never be dramatic or something is wrong.
Usually a PCM should have the same amount of bass as a DD feed, but a PCM mix and DD 5.1 mix are done separately, so there may be differences.
There is another variable as well. Most cable systems insert their own compression algorithms to increase available bandwidth for other services (phone, internet, etc.) and the ever-increasing number of video channels. I doubt very much if your STB is delivering uncompressed 2-channel PCM. It would require too much bandwidth, and cable systems wouldn't accommodate it.
A better comparison would be to play a DVD of a concert and set your DVD player to do the mixdown to two channels. Then compare that with the CD version of the same concert in two channels. Assuming the mixes were similar, the two should sound very similar in terms of sound quality, detail and frequency response.
A Toslink optical digital connection should normally deliver either a Dolby Digital 5.1 datastream or a PCM 2-channel feed form your DVD player.
Regards,
