Yeah the PS3 can only decode the formats, not bitstream them, because of hardware constraints. I don't know all the mumbo jumbo, but you can easily find it on any thread about DTS-HD MA. It converts any of those formats to LPCM and sends it to the receiver
in addition, on the AVS Playstation forum, it has been said that even if you choose bitstream, it still sends the lossless codecs as LPCM. I have not been able to confirm. But yes, it will NOT send the audio to your receiver to be processed by the receiver.
