you don't want to use 7 channel stereo, unless your listening to music and want it to be coming out of all speakers.
You want to use either DD or DTS and make sure you have your back speakers turned on. I assume you already have your speaker setup showing 2 rear speakers, otherwise, you would not get anything in 7-channel stereo mode. What I do on my 2805 Denon is push the "Surround Back" button in the lower right hand corner of the remote. This will cycle through the different options available (matrix, non matrix, etc...) For movies in DD, the display on the receiver will show "Dolby Digital + PLIIx".
