Faizal:
So would it be fair to say then that a PCM soundtrack will sound pretty much the same when played on a PS3 and on a stand alone BD player as compared to Dolby True HD and DTS MA sounding better when bitstreamed from a stand alone player than being decoded on board the PS3. Hope this is not too confusing?
Faizal,
Technically speaking, a Blu-ray with a PCM track should sound the same whether the source is the PS3 or a Standalone deck, although there are factors that can play into this. But technically you shouldn't be using any converters in either unit if you are playing a PCM track, just sending the PCM data on through to your AVR to D/A convert and process for your speaker/room setup.
When it comes to the Lossless flavours of DD and DTS, there is quite a discussion to be had as to whether it's better to decode in the source box or in the receiver/pre. This question is obviously the one that relates most to the quality of the components being used as the digital conversion is more than just straight forward and even though it is in the digital realm there is technically a generation loss (however minute) when converting a compressed digital data stream (yes even a lossless one) into a different type of data stream in real time.
Andy is the man to listen to when he says have a listen for yourself as, in the end, it is your home theatre system and you should explore it to find the setup you like the best from it. It feels good to know that you tuned something up nicely! I can only offer you my opinion based on my setup and reviews I have gathered online. I personally own a Panasonic DMP-BD30 BD deck and a Denon AVR-3808A receiver. Granted that my BD won't decode DTS-HD MA internally but I did have a play at decoding Dolby TrueHD in the player vs the receiver, and in my opinion there was a noticeable difference in the depth and spacial uniformity of the soundfield when I decoded the signal in the receiver. Now, I'm not looking to brag, but I do feel I have trained ears as I work as a sound engineer. And finally with relevance to Andy's comments, it really comes down to the quality of the decoding in your AVR as to how much of a difference you might hear between one method and the other.
From reviews that I have read online regarding the PS3. The internal decoding of the PS3, which is achieved through software, is very good but comes up just shy of the experience afforded by a standalone deck bitstreaming to a good AVR. I bought my BD30 when it first came out, which was coincidentally right at the same time as the software update that enabled DTS HD support came out for the PS3, and I considered both options. In the end I opted for what I believe brought me the higher sound quality, even though I would have enjoyed playing the games, because I think my ears hear it.
Anyhow those are just my musing on the subject. And hey, if you go for one and never get to A/B it against anything else you'll still be blown away by the movie experience without a doubt!
Tom