If i remember correctly, there are two settings for the sound, one for optical and one for HDMI in the Playstation settings. Each one you can set to Bitstream or Linear PCM. I tried to make my PS3 bitstream to my receiver once and it told me that if I set HDMI to bitstream it would not bitstream the HD tracks. I can't remember if it would have not decoded them, or just continued decoding and sending as LPCM, but basically yeah, vassillios, it can only go LPCM.

Steve