Yes, DPL and Neo takes stereo sources and kerfutz with those two channels, what with phase information, delay, and various other things and somehow manage to get something different to come out of all your speakers. Yes, it's not "true" multi channel but if gives those who insist on getting sound out of every channel they paid for something to take home.
Basically, without these digital processing schemes, whatever you're playing through your system will only come from the channels it's recorded in. For instance, stereo music from CD, MP3, etc, is only supposed to come out of two speakers, not five.
Now, keep in mind that there is no "best" here. That is strictly a personal preference.
For movies, I prefer the sources original plain vanilla digital 5(or whatever).1, from either Dolby Digital or DTS with no added DSP. Even then, not all speakers are busy at all times. The surrounds make no noise for long stretches and that's intentional.
As for music, I prefer plain two-channel stereo with no fake DSP effects. I don't do games so I have no opinion. I do have a few 5 channel SACD's but that's a different animal. They were recorded that way and I play them as plain vanilla as well.
As for your wanting to add effects with the DSP modes your system offers, just keep playing around until you find the onethatsounds best to you. That's really all there is to it. That's kinda like asking for the best flavor ice cream. In my case, assuming it's a quality ice cream to begin with, I loves me some vamilla.
