PS3 and bitstream setting

[ratasnipes]

I just purchased a new receiver which is the sony str-dh800. It DOES support TrueHd and all the other high end and lossless audio tracks. I am using my ps3 as my blu ray player.

Ok, here’s my dilemma.
I was watching the matrix on blu ray which has a 5.1 truehd track. I have my playstation set to LPCM cause everyone says that its better. The movie sounded pretty clean but it kinda left me wanting for more…my receiver showed that it was putting out LPCM too so I know that there wasn’t anything wrong with my receiver.
Now, I switched the playstation to bitstream and re-watched the movie and I can honestly say that there was a huge difference. Changing it to bitstream sounded so much better and the surround was so much fuller. By better I don’t mean louder either.
For example, the part when Neo fights agent smith by himself. When they jump at each other and then it slows down, when I had it on LPCM, it sounded decent but I expected a much more better sound from this scene. When it was on bitstream, it sounded amazing. I could hear the shots coming from my center, then my fronts, then my surrounds and it felt like I was there BUT my receiver only showed that it was getting Dolby Digital.

Oh and all of this was at the same sound level.

So my question is, why does it sound better on bitstream??