Just to wrap this thread up in case someone later wants a difinitive answer while perusing the boards...
I actually exchanged the BD-P1200 for the BD-P1400 for the upgraded audio codecs on board. The set up was the same for both.
Multi-channel inputs into the receiver - analogue 5.1 cables - and the player set up to give me PCM sound, without downmixing or compression gives me an awesome 5.1 experience. Lossless mixes are noticeably fuller than the standard 5.1 Dolby Digital.
The downside to this os that my receiver (Yammy RX-V1400) won't let me monkey with any advanced settign while in Multi-Channel in mode. That is, I can't create a 5.1 matrixed surround when only 2 channels are output from the receiver. I also can't use the rear surround speakers until I upgrade. Also, no delay or voluem settings on the reciever. On balance, given that my room is nearly ideal for surround sound, I think the trade-offs are well worth it.
