In short, if you are set up as above,
whatever fancy audio format you choose from your Bluray disk will automatically get decoded in the PS3 so that the AVR doesn't have to deal with it. Only the newest AVRs will decode the new HD formats so this is a great thing as you wont need to upgrade your current one.
It then takes the decoded data and sends it out via the HDMI to the AVR as PCM data (think of it as a universal digital format or transport layer.) Because the AVR is receiving generic digital data, it doesn't have to decode it nor does it know or even care what fancy HD format it was in originally. That's why the AVR doesn't tell you anything except "PCM". My Denon, simply says "Digital" or something like that.
But in the end, you still get true HD surround sound out of your speakers. The only thing it won't do in is way is 7.1 formats if you are set up for that. It will however, automatically strip it down to 5.1 for you automatically. To get true 7.1 you would need to invest in a receiver that is capable of doing the decoding of HD formats on the AVR side side.
Last edited by Murph; 03/20/09 07:13 PM.
