Thanks John, that's great to know, makes the decision for a new receiver cheaper and easier, plus you saved me alot of time that I was spending trying to get a definative answer on that same question.
It does mention in the PS3 manual that all you need is a device compatible with linear PCM 7.1 ch to output 7.1 ch. audio from the HDMI out.
There are alot of folks on many of the AV forums that are still confused on this whole SACD-PS3 issue.

A computer once beat me at chess, but it was no match for me at kick boxing.