Re: Audio Setup
As far as I know right now no player will send undecoded TrueHD to your receiver, it's decoded in the player then sent to the receiver as Multi channel PCM (That's what my Denon 3808ci calls it).
I do know even with it decoded in the player it sounds better than the old DD or DTS does.
I know a future firmware upgrade on the PS3 is supposed to allow it to pass to the receiver to be decoded (and that will light up the TrueHD light) but no date has been announced for that update.
I'm not sure about the updates for your S-1.