Just finished explaining this to someone on the PS3 forum site. Here is what all this stuff really means and to use the dts and dolby HD features you need to select Linear PCM from the PS3 console. If the movie already has an Uncompressed PCM option then make sure you set it to bitstream.
LPCM from an original recording is at 24bit/48khz. Then the studio master bring it down to 16/48 due to extras or whatever other crap is on the Blu Ray Disc if the disc is using BD25 (Meaning 25gb) Now, with the original 24/48 the studio can take this and ask Dolby or dts to do some work. Here is what both companies do...
Dolby takes the original recording 24/48 and use TrueHD to compress and playback the original recording with the 24/48 playback. How does this work? Just think of a Dolby as a .zip file and the PS3 as the processor that can uncompress it. This is in other words the original recording. Right? Wrong. The only reason that Dolby isn't the original recording is because Dolby has set a standard with TrueHD that for some really crazy odd ball reason subtracts -4db from the Dialog Normalization when playing back TrueHD content. Think of it as flag (Like DD-EX) that you can't turn off. Why did they do this? Because they believe that louder isn't better. And since no receiver can take away the "Flag" placed by Dolby; TrueHD can never be listen to as bit for bit from the original recording.
dts-HD-MA-HR now can take the orignal recording and compress (.zip) it to the BD25gb dts-HD-HR (Which is close to the original) / BD50gb dts-HD-MA (Which is the original) and play it back from the PS3 with "Yes ladies and gentleman" bit for bit identical to the original master 24/48 just as old boy Steven Spielberg intended us to enjoy our film. A flawless perfection.
So why use dts or Dolby if LPCM can do it? Because LPCM still takes up alot of space on any type of disc. Dolby and dts are better at compressing sound and keeping it closer to or at the original recording. So next time you play a Blu Ray movie title which format should you choose: Here's a little chart to show you the order...
dts-HD-MA = LPCM 24/48 > TrueHD > dts-HD-HR > LPCM 16/48
