The way I understand it, in general terms, lossless audio is bit for bit identical to the master. "Lossy" audio, or the old Dolby Digital eliminates data that is deemed to be non essential. Perhaps it might be sound that is outside the spectrum that is audible by the human ear or it may be other data. It varies on each movie. Is there a huge difference? I don't really know. You would have to do an A/B test of blu-ray vs standard DVD of the same movie. Maybe there isn't a significant audible difference and it's all just hype. Anyone know of any blinded A/B tests results out there?