Many things to clarify here:
1) We really do not tend to use the terms "real" and "fake" to describe surround sound. The terms that would be more apt and correct would be "discrete" and "matrixed"
2) Whether the surround sound is "discrete" or "matrixed" depends upon the source signal. That is to say - it is the recording that is either "discrete" surround sound, "matrixed" surround sound, stereo or mono.
3) Depending on what decoders your receiver has, it will either be able to play back the "discrete" surround sound or it won't.
4) Your Sony STR-DG720 includes Dolby Digital, Dolby Digital EX, Dolby Pro Logic IIx, DTS, DTS-ES, DTS 96/24 and DTS Neo:6 decoders.
5) In addition to all of those formats, it can also accept uncompressed multi-channel LPCM (Linear Pulse Code Modulation) audio via its HDMI inputs.
So...let's say that you are playing a stereo source - something like a regular CD or a SD television channel. The source itself only has 2 channels. We call that stereo.
In this case, your STR-DG720 receiver could make use of its Dolby Pro Logic IIx decoder. The DPL IIx decoder will take that 2 channel signal and expand it to a full 7.1 speaker output. This is called a "matrixed" surround sound output because the decoder used a special algorithm to determine how to "spread" the 2 channel signal to all 7 speakers and your subwoofer.
Now, let's say you listen to a DVD with a 5.1 Dolby Digital soundtrack. The recording itself is "discrete", meaning that there are a full 5.1 channels in the recording itself. When you connect your DVD player to your DG720 receiver using either an optical (TosLink) or digital coax S/PDIF cable, that very same 5.1 discrete Dolby Digital audio gets passed straight from the DVD disc to your receiver. Now, your receiver can make use of its Dolby Digital decoder to play back that 5.1 channel recording using 5.1 speakers.
However, you also have the option to further expand the original 5.1 signal to a full 7.1 speaker output. Once again, Dolby Pro Logic IIx is used, but this time, instead of expanding only 2 channels to full 7.1, it merely expands the original 5.1 channels to 7.1 speakers. Technically, this is again, a "matrixed" surround sound. The receiver is taking the original 5.1 Dolby Digital - it is decoding it into 5.1 raw, uncompressed PCM audio - and then the Dolby Pro Logic IIx decoder expands that 5.1 audio to 7.1 audio using a special algorithm.
It's all very much the same with DTS.
In the case of Dolby Digital EX, the recording itself is 5.1 channels, but embedded within those 5.1 channels is a "matrixed" 6th channel. It is marked with a "flag" and if you use the Dolby Digital EX decoder in your DG720 receiver, it knows to look for that "flag" and when it finds it, it knows exactly how to extract that "matrixed" 6th channel and play it back.
DTS-ES has the option to do the very same thing as DD EX, but it can also go one step further and have 6.1 "discrete" channels of audio. Again, this totally depends on the recording, but if the disc contains a 6.1 discrete DTS-ES soundtrack, your DG720 can play it back perfectly using its DTS-ES decoder.
Finally, there are the new "HD Audio" formats - which are Dolby Digital Plus, Dolby TrueHD, DTS-HD High Resolution, DTS-HD Master Audio and Uncompressed Multi-Channel LPCM. All of these are pretty much only found on Blu-ray discs for now, hence the moniker of "HD Audio".
Your DG720 receiver does not have decoders for these new "HD Audio" formats. But it CAN accept up to 7.1 channel Uncompressed LPCM!
That's good news
Basically, all you need - in terms of a Blu-ray player - is a player that can handle the audio decoding itself. Examples of such players are the Sony PlayStation3, the Sony BDP-S550, the Panasonic DMP-BD35 and Panasonic DMP-BD55. Any of those players have the capability to fully decode any of the new "HD Audio" formats inside the player itself.
When the "HD Audio" is decoded inside of the player, the result is Uncompressed LPCM audio that comes out of the HDMI connection. Whether it is 5.1, 6.1, 7.1 or some other number of channels depends entirely on the recording that is on the disc itself. Most Blu-ray movies so far are still 5.1 audio, but a few have 6.1 or 7.1 recordings.
So when you have one of those Blu-ray players, it will decode the "HD Audio", send out Uncompressed LPCM via HDMI and your DG720 receiver will play it back exactly as is.
Hope that clears things up a bit for you. Best of luck.
