If the source is 5.1 Dolby Digital or DTS, then that's what you get, with the option of using Yamaha's "Enhanced" version. Pushing the decoder select button (lower left on your remote) will cycle through all of the available decoder choices. If you have a 6 or 7 channel set-up, you will have a few more choices available to you. If you have a 5.1 speaker set-up, then a Dolby Digital movie will allow "Surround Standard" (straight DD decoding), or "Surround Enhanced", which adds in some Yamaha sound-field processing.
PLII (or PLIIx if you have 6 or 7 channel speakers) is for two-channel sources, and is not applicable to 5.1 ch. sources. If a given input to your receiver is flipping around between 2-ch. and 5.1 ch. source material (eg. DVD previews versus the movie itself, or different channels from a cable box), your receiver is smart enough to flip between the most recently selected 2-ch. mode for that input, and the most recently selected 5.1 ch. mode for that input.
Some of the other Yamaha-proprietary sound-field processing modes work for both 2-ch. and 5.1 ch. source material (selected via the other buttons on the bottom of the remote), your manual has the details of which modes apply to 2 ch., 5.1 ch., or both.
You can always tell the number of channels present on the source signal, by looking at the receiver's front-panel display. The L,C,R,LS,RS little lights will be on or off, as appropriate. Note that these are reflecting the presence or absence of input signal, and NOT how many speakers are being driven. (Since many of the modes for 2-ch. sources, like PLII(x), are driving all of your speakers.) Also, with a digital input, you will see some combination of the Dolby Digital, DTS, or PCM indicators lit.
