Need help with SR607 audio setting

Connected to my Onkyo TX-SR607:
I have a Comcast (Motorola) HD dual-tuner DVR set top box (HDMI)
A Panasonic Blu-ray player (HDMI)
An Apple TV (current version as of April 2012) (HDMI)

All are connected to my SR607 via HDMI cables (HDMI out from each; to each’s separate HDMI in port on the back of the Onkyo AVR)
Video is sent to my HD Panasonic 50” plasma via HDMI out from the Onkyo AVR.

Technically, this all seems to work but I’m not sure if it’s working to the best capability of the Onkyo AVR.

In short, I’ve read pages 63-70+ of the TX-SR607’s manual several times and searched many postings online, yet I still have no idea what I’m supposed to do with all of the sound setting options in this receiver as far as default settings.

Like other similar posts I've searched, I just want this receiver to take the best sound from any source and send its best sound out to my 5.1 speaker system.
What I seem to face in Onkyo’s settings menus are some 35-40 various sound options – PCM, DTS, DD, DS, PLXII, mono, stereo, 2 CH, etc. – I’m basically lost. How do I set the receiver’s default setting for each input source so that they use the best sound coming in and sends that best sound out to my speakers?
As far as I know, all of my sources have 5.1 or better capability, including Comcast’s box. I also figure that not all programs on TV (or not all DVD’s I’m likely to play on the Blu-ray) are feeding 5.1 sound.

I may be over-thinking things, but the AVR owner manual gives no easy step-by-step of how to set up the sound.

Thanks in advance for any assist.

Hi dhodges00,

It is best to let the receiver decode the audio codec coming in. Since each persons ear is different it is left up to the customer to decide on the best listening mode.

I'm all for letting the receiver do the decoding, but how do I let it do that?
After all my fiddling with various settings, I've now got some defaults set to 'Last Valid'. Some set to 'Dolby PLII' (or something). They're all over the board in other words. Do they all need to be set to Last Valid? Or, how should I set them?
Should they be at some factory default setting and if so, what would that be?
Thanks again. And again as you can see, I'm a bit lost on this.

Hi dhodges00,

Yes, if you set all of the defaults to "last valid" then the receiver will decode what's coming in.