As hawke said, you want to set DD and DTS for bitstream. The 48 kHz vs 96 kHz you are referring to is for PCM. The PCM setting comes into play when you use analog connections to the receiver or when you play DD 2.0 or PCM (CDs) tracks and use a digital connection.
The 501 has 96 kHz dacs, so its safe to set it to 96 kHz. If the track you are playing is sampled at 96 kHz or lower, it will be sent as-is (there is no harm in sending a 44.1 kHZ stream, as from a CD, to a DAC that can handle higher sample rates.)The only caveat is that some dvds are copy protected (although I personally haven't found one) and supposedly the dvd player will not send 96 kHZ over the digital out. In that case, if PCM is set to 96 kHz you will hear nothing - that is the reason the dvd players offer 48kHZ. The dvd player will downsample to 48 kHZ.
So 48 kHZ is the most compatible and will work for all sources. I have it set to 96 kHZ and use an Onkyo 502 and have yet to find any cd or dvd that won't play properly.