Hi everybody

Please excuse my ignorance.
I'm trying to setup true 5.1 surround sound with my Xbox 360. The Xbox 360 outputs Dolby Digital 5.1 through an optical cable.
I originally had a cheap Logitech 5.1 speaker system that didn't contain a Dolby Digital decoder or optical in so I couldn't get true 5.1 surround sound.
I see a lot of receivers around that have optical in and decode Dobly Digital then I saw this and now I'm confused...
Sony SDPEP9ES
* Dolby Digital (AC-3) and Dolby Pro-Logic processing
* Bass Redirection to suit all speaker types
* Basic and Advanced menu control modes
* Dynamic range compression control
* Can be used as an external high grade D/A converter for CD players
* 3 x optical / 1 x coaxial / 1 x RF digital inputs
* 1 x optical digital output
* 5.1 channel full bypass inputs to connect other pre-amps/processors
* Remote Control
* Technology
* Digital Cinema Sound with Cinema Studio and Virtual 3-D modes
* 24 Bit processing for unmatched dynamic range and clarity
* Dolby Pro-Logic processed digitally
* Digital Parametric tone control for Front/Centre/Rear speakers
* Independent jitter-free Current Pulse D/A converters for each channel
* Full Feed-Forward digital filters for each channel
* Digital i Volume Control
* Frame and Beam Chassis
If I plug my Xbox 360 into this via the optical cable and connect all the appropriate speakers will I get true 5.1 surround sound from this device or is it meant to be hooked up to a receiver?
I missed out on Sony TA-VE215 the other day which I think would have been perfect for what I need.
I would prefer a compact receiver as I dont have a lot of space. Can anyone recommend any good compact receivers that do what I need and may be able to find for ~AU$150.
HUGE Thanks
