Take the example of a Dolby Digital signal on a DVD. This is a compressed format, it takes 10mb of info and squeezes it down to 1mb (numbers totally made up, actual compression ratio varies). So, in order turn a 1mb chunk of Dolby Digital into audio you can hear, it needs to be uncompressed back into 10mb.
That decompression, or decoding, can usually take place in one of two locations, 1) the dvd player, or 2) your receiver. When it is decoded in the player, 10mb of linear PCM will be sent to your receiver and then played with no further decoding. When it is decoded in the receiver, the player sends out 1mb of bitstream output, which is turned into 10mb in the receiver.
So, which sounds best? Well, if your AVR doesn't decode the bitstream format you're sending it (Dolby TrueHD for instance), you won't get any sound at all, until you switch to Linear PCM. Now, your 705 will decode DDTHD and many other codecs, so why wouldn't you want to just send everything bitstream?
Well, on Blu-ray movies, the menus have little button clicks and swooshes. These are only audible when the decoding is done in the player, these sounds are mixed in, and the whole mess is sent out Linear PCM. If you won't miss the clicks and boops, allowing your receiver to do the decoding can be a simpler setup.
For plain Dolby Digital and DTS I can't hear a difference when switching from LPCM to bitstream and vise versa. The only thing it does is change the display on my 4306 to say Dolby Digital or Multi Channel etc.
BTW the PS3 will send plain DTS if using bitstream when viewing a DTS MA HD audio track. This would be less desirable than the actual lossless audio if using LPCM.
My panny BD player is setup to bitstream to my receiver but it alsosends the menu sounds... swooshes and all. My AVR (Marantz 8002) tells me when the source is sending PCM or it's internally decoding a codec and exactly what it's decoding.
I guess that might be why sometimes I see sound coming as "pcm" instead of bitstream from the BD player. I have a little PCM led on the AVR that tells me and sometimes it's activated while navigating discs... I didn't even realize it was a kind of inconsistency. I must have that setup to dynamically switch in the BD player.
I must admit it was one happy day for me the first time I saw that DTS HD MA led config come up on my AVR. I had waited so long to see it.
As far as I knew the PS3 (I have one) doesn't pass the re-encoded bitstreams. Let me know if I'm wrong because that woud be way cool. I'm in the understanding that the PS3 will decode everything and pass it as LPCM only over HDMI.
As far as the ARV light coming on for PCM Wayde. Don't the bitstreams get decoded into PCM in the AVR?
I'd be interested in the answer to this. Is LPCM a transmission meathod or a final decoded audio format
It ultimately boils down to the compressed audio on the disc getting decoded and uncompressed, but does an AVR decompress bitstreams and play the audio or is all decoded data then considered LPCM meaning an avr decompresses/decodes a bitstream into LPCM and outputs this. Which of the following is correct:
Compressed audio on the disc - player decodes into LPCM and transmits - AV setup plays LPCM
Compressed audio on the disc - player transmits info as undecoded bitstream - AV decodes and plays bitstream audio
Compressed audio on the disc - player transmits info as undecoded bitstream - AV decodes bitsream - AV plays decoded bitsream out as LPCM audio.