2 channel allows the input signal to be sent thru the processing circuitry,(primarily equalization) straight bypasses it. (both use the sub-woofer). Pretty much a matter of personal taste and speaker capability. Personally on my 1500, as I have old, old, old floor standers w/ 10" woofers that just won't die, I prefer direct stereo or pure direct. The addition of the subs with 2 channel music makes the sound way too bass heavy.
The manual gives a pretty good description of the different sound fields. Easy to download at tha Yamaha site.