Originally Posted by CybrSage
AFAIK, it converts to LPCM and outputs that.
You are correct, in concerns to the original PS3. The original would do TrueHD but it was using the PS3's decoder not your receiver and you have to set the output on the HDMI setup in the PS3 to LPCM to get it. Still sound great, been using it for a couple of years with no complaints.
If I remember reading correctly the newer PS3 slims will send the TrueHD signal straight to the receiver. Here we go found the Engadget article a while back.
Hope that helps rev.