Receivers 101 - PCM???

[sparksj]

I have been in the market for a Receiver. The places I shop have store reps that don't know what they're talking about, so I have been forced to research on my own. I am a bit confused about PCM and what receiver to buy. As I have become addicted to this forum, I have found that the people in this forum seem to be the most knowledgeable around when it comes to this kind of thing. . Here are my questions.

1. I recently bought an older "open box" receiver only to find that the HDMI only passes video and not sound. As I read the stats on the different boxes, it is not always clear whether they pass video only, or sound and video. What should I look for to indicate this?

2. I have seen some receivers list things like DD 5.1, DTS, etc. In the list it also lists PCM. However, I have read that PCM can be stereo only. Are there two kinds of PCM? If the BR disk has lossless PCM how do I know if my receiver can handle that in full surround or stereo? My guess was that PCM just means lossless and if the PCM source is 5.1 channels, then it will be full surround and if the source is stereo, then I'll just get stereo. Is that correct?

3. Since I play BRs on my PS3, I know Ithat I don't have to get a receiver that decodes DTS HD MA. My understanding is that the PS3 decodes it and then passes it though the receiver. What would I look at on the receiver stats to know if it can do this? Is this simply PCM output too?

I guess in the end, I could just ask for advice on what receiver to buy but, as much as I want the best sound, I also don't have tons to spend. My spending goal for the receiver (without speakers) around $400 +- $100.

I know there are a lot of questions on this, but I would appreciate any clarity you could provide on this.