The way HDMI profiles work is that they are required to meet certain specifications. HDMI 1.0, as mentioned above, handles 7.1 LPCM. Any version above 1.0 must also handle it as per the rules of HDMI. The AVR-2308CI by default handles 7.1 LPCM, but it can also decode the bitstream if the player supports it. The original PS3 systems did not support bitstreaming but could internally decode DTS-HD and Dolby TrueHD formats internally and convert them to LPCM for output. The PS3 slim can bitstream, and will also internally decode the formats and output them as LPCM should you desire them to do so (in the event you have a non HDMI 1.3 receiver).
This is all an acceptable way to get the best out of your lossless sound. The processes do not change, the only thing that may change is where they occur. The chain of processes is as follows: bitstream is read from disc, bitstream is converted to PCM, and PCM is converted to analog through the digital to analog conversion process.
If the PS3 decodes the bitstream and outputs LPCM the receiver will convert the PCM to analog. Since the receiver gets a digital signal it can still add any post processing that is necessary such as bass management, equalization, and DSP modes. If you bitstream to the receiver the conversion to PCM occurs inside the receiver instead of the PS3 (assuming the PS3 would be a slim). I don't believe there has been a credible report of an audible difference from using one method over the other. You might not get that tingly sensation by not seeing the DTS-HD Master Audio logo light up on the receiver, but the sound is still there.