The PS3 doesn't bitstream audio over HDMI anyway. You have to let the PS3 decode the formats and send it out via LPCM. In this case, it wouldn't matter that your audio isn't coming from HDMI or not. You can transmit PS3 video over HDMI and LPCM from the PS3's optical connection for the same result. As long as the PS3 is your source, HDMI bitstream audio is a non-issue and using a separate digital audio connection to the receiver is fine. Hi Dave , Thanks for your advice . I really appreciate it . I guess I will stick with this receiver . Right now , I do not have the funds to purchase a better receiver . Maybe in the futre I will . Also , the ps3 will be ok for dolby digital , dts etc... ? Thanks !