so this means that if the output is PCM it is even better than if it was DTS or Dolby which are compression algorithms, me thinks...
No, I don't believe this is correct. The original audio is DTS, it is then decoded to PCM. That decoding step may in some cases produce some loss of detail in the audio. If the original audio was PCM, then was somehow converted to DTS (though I don't think that is possible), your statement may be correct (as the conversion could lead to loss of detail). The best quality audio is the exact same format from the original audio source, unaltered. That isn't to say that your ears may not prefer the altered singal - I tend to like a lot off bass in my audio (a processed signal), which would send an audio purist into a screaming fit! This all leads to the next point which I think needs to be made, even though you would be aware of it.
Obviously, bitstreaming is the process where the original audio is taken, and then no processing at all is done to it during the decoding chain - the reason why this is done is so that the audio quality is as close to the original audio source as is possible. So bitstreaming the DTS means that the audio is not converted to anything. That is, it starts out as DTS in the original source, and then ends up being output as DTS by the speakers/ouputs. This is the optimal quality (even if it may not necessarily sound best to your ears). If converting is being done (e.g. DTS to PCM), or the soundcard is altering the signal (e.g. applying audio effects), than it is not bitstreaming. As mentioned though, processed audio - as in your case - may actually sound better to your ears than the original un-processed DTS signal. Everyone is different, there is no right and wrong.
Related to this, Prinz mentioned something in the Install Center update thread yesterday that is related to your whole situation:
AC3Filter has one big advantage still: It has automatic fallback to non-bitstreaming if bitstreaming is not supported by the audio-renderer. LAV - Audio simply doesn't work if Bitstream is enabled but the audio-renderer doesn't support it.
That is, LAV should ideally detect that the bitstreaming is not working, and than gracefully fall back to non-bitstreamed, rather than throwing a hissy fit as it currently does.
As soon as optical is selected the indication of DTS appears on the speakers LCD display.
As expected, DTS is digital only - you won't get it via your analog connection, it is that simple.
but my ears get the impression that all the effects are there.
My advice? Forget about getting DTS output - you clearly like the processed signal better, and then whole point of media playback is enjoyment. If you output a format that your ears don't like - even though it may technically be the best signal - then you are just wasting your time
But even with optical I can't bitstream, I still have to leave the DTS option in LAV configuration unchecked.
If that option is disabled, there is no bitstreaming. If a digital connection still does not bitstream and your hardware supports it (which it seems to do), there is a configuration problem on your audio system.
So with these new elements we can be pretty assured that I'm getting DTS and Dolby for sure, don't you think?
Not with your analog connection, no - you said yourself that LAV shows PCM. As I said above, forget DTS - just enjoy the PCM
Time to get on my soapbox I think. [start rant] One thing I have always stressed about media playback is this. I constantly see people over on Doom9 stressing over theoretical minute percentage imperfections in the video that is displayed while they watch a movie, or the audio they hear while they play a movie. These people spend more time analysing the statistics of their playback devices (e.g. the OSD in madVR) than they actually do enjoying the media they are playing. Don't go down that path. I've always stressed this simple thing: "Does the video look fine to your eyes, and does it sound fine to your ears?". If so, forget about trying to improve it - it's pointless. So many people ignore this though. [end rant, off soapbox]
Sorry for the rant, but I spend nearly as much time on Doom9 as I do here (lurking, rather than posting), trying to learn more and improve my knowledge about media playback. It's a really good source of media playback knowledge, and I am grateful for it. But, I constantly see people whining about such minor detail - for example, a typical post may be "I can see on madVR's OSD that I have 1 repeated frame every 3 days, my life is ruined because of this, how do I get it to zero????" - and it really, really gets on my nerves.
ehat