It doesn't sound stupid; it sounds like typical Denon/Marantz manual indiscernibility. Modern HT receivers and their manuals are all relatively complex, and the D&M manuals are particularly difficult. I'd suggest that mastering it is just slightly less difficult than mastering the Semi-Slav.
I looked at the 5007 manual. You probably are mainly concerned with the "Selecting a listening mode" section beginning at page 71. Playing a CD on your PS3, you'd press Music and select one of the listed modes. Straight 2-channel Stereo would be the default with Auto, but I never use Stereo. I always use DPLII(preferred slightly over the similar Neo:6)to extract surround ambience imprisoned in the front channels and send it to the surrounds where it belongs. The 5007 then "remembers" the mode you used last for that type of material and uses it unless you select a different one.
Playing a Blu-ray or other video disc, you'd press Movie and select the mode from those listed. For a Blu-ray you'd select multi-channel PCM(if the player had decoded the DTS to the basic digital PCM), or DTS-Master if the receiver is going to decode to PCM the original DTS as output by the player.
I never use any type of "Direct", since it allows no processing, and I want all the processing that is helpful.
Multi-channel stereo simply duplicates the front speakers in the surrounds and isn't as realistic as a mode such as DPLII which sends ambient material to them.
