All of this is fairly easy to digest, but there are issues that muddy the water even further. Even if your Blu-ray player and AV receiver both feature HDMI 1.3 outputs and the receiver can decode HD audio formats, the raw bitstream only contains the movie's primary soundtrack, so any secondary audio (found on BonusView picture-in-picture features) won't be transferred to the receiver.
Another issue centres around PCM conversion - although the vast majority of Blu-ray players can offer PCM output over HDMI, some of the models we've tested recently such as the Denon DVD-1800BD and Sharp BD-HP21H only convert the backwards-compatible 5.1 DTS ‘core' (the regular 44.1kHz or 48kHz bit) and ignore the DTS HD Master Audio lossless ‘extension' (the extra data needed for the higher sound quality), or in the case of Dolby TrueHD, they only convert the interleaved Dolby Digital 5.1 track. In both cases you miss out on the extra sonic detail that the formats were designed to deliver.
Additionally, some players (such as the Pioneer BDP-LX71 and BDP-51FD) can decode Dolby TrueHD and output the full bandwidth signals from the multichannel analogue outputs, but are unable to do the same with DTS HD Master Audio tracks - once again they only extract the 5.1 DTS core. Although a firmware update will soon add this feature, it's yet another part of the puzzle that consumers have to solve when buying a Blu-ray player or AV receiver.
And then of course some manufacturers don't help matters with misleading marketing. Take for example the Onkyo TX-SR576 receiver - by far the most baffling HD audio product we've encountered - which was originally marketed as having HDMI v1.2 inputs and Dolby Digital Plus decoding, another Blu-ray audio format. Thing is, Dolby Digital Plus can only be carried over HDMI v1.3, which lead many to question how exactly it was able to accept a DD+ stream in the first place. Turns out it actually features v1.3 inputs, but Onkyo didn't want people to think it could also decode Dolby TrueHD and DTS HD Master Audio, so the company listed v1.2 sockets on the spec sheet instead. Ironically, the whole thing was done to reduce customer confusion.
Another question that often arises is why we need these lossless formats at all, when Dolby TrueHD and DTS HD Master Audio sound identical to uncompressed PCM and most Blu-ray players convert them to PCM anyway with no drop in quality. Why not just put uncompressed PCM soundtracks on all Blu-ray discs and cut out the middle man? The answer is space - Dolby TrueHD and DTS HD Master Audio basically provide a way of packing bit-perfect HD audio onto a Blu-ray disc without taking up anywhere near the amount of space that uncompressed PCM would require, leaving more space for extras, additional soundtracks and other data. But try explaining that to the average Joe on the street…
Hopefully as suitably-equipped receivers become more widespread and Blu-ray manufacturers stop mucking about and launch players that can handle the whole shebang, we might be able to get some clarity on the matter. As for now we'll keep on trying to make sense of it all.