Go through choose HDMI to output sound when the next screen comes up it will give you the choice to set it manually or auto, choose auto because the PS3 will then talk(for lack of a better word) to your receiver to see what it can do and set the output accordingly. The PS3 will choose the highest format that is available on the disc DD 5.1, DTS, and so forth from the list of formats that your receiver is able to handle.