Linear Pulse Code Modulation. It's essentially 0's and 1's that are indicated by pulses of electricity or light. PCM is a very common digital audio format, but it's compressed. The "linear" part indicates that the data is not compressed from the source. The PS3 is capable of decoding encoded audio bitstreams (Dolby Digital Plus, TrueHD, DTS-HD) and converting them to multichannel uncompressed (linear) PCM for high fidelity playback.
More important than processing abilities would be your speakers. If your speakers are sensitive and utilize amplifier power efficiently as well as an easy load (typically nominal 8 ohms) I would suggest something like the Marantz SR-4001/4002 or the Yamaha RX-V661/663. The Marantz SR-4002 and Yamaha RX-V663 are newer than the SR-4001 and RX-V661 and still allow decoding of multichannel linear PCM.
If more power is needed you may chose to add amplification to those receivers I recommended above, or get a more powerful receiver from a manufacturer such as Pioneer Elite, Yamaha, Onkyo, Marantz, Denon, and many others.