Audio Bit Stream/PCM?

Still unclear if I should set Audio to Bith Stream or PCM. Does the setting effect just the playback of disks of the recording or both. What would be the common default setting? Does the setting effect the Audio Video sync? At time I feel the ath Audio is slightly out of sync (or is it just me). My main playback unit is Dolby surround sound (not Dolby digital).

PCM is the standard audio-signal (like from CD-Player). It’s “uncompressed”.
Bitstream are the bits that are on the DVD - so it let’s out the DTS or Dolby signal. To be able to play this, you need a decoder like in your amp.

Because the players on the analog outputs always give an analog signal, it doesn’t matter what you set up for the TV set.
For the amp, you have to set it on bitstream to receive the DTS or Dolby signal.

So if I read correctly it make no difference on record but on playback pcm is fine for Dolby surround sound and bit stream for DTS and Dolby Digital

A Dolby surround sound speaker system takes audio from two analogue output channels (stereo left & right) to decode to its surround sound speakers. A digital surround sound speaker system (DTS, Dolby Digital, PCM, etc.) on the other hand takes audio from a digital source such as from the digital coaxial or optical outputs on a player and then performs a digital-to-analogue conversion within the amplifier itself to output the sound to the appropriate speakers.

Some digital speaker systems will only take a PCM (uncompressed) data stream, where as others with a built-in decoder will take either a PCM or a direct compressed bit stream. For example, many DVD players do not support the decoding of DTS, however most DVD players can instead pass this compressed DTS audio stream to a suitable digital amplifier with a built in DTS decoder to decode the audio.

As your speaker system connects via the analogue outputs, changing the digital audio output to Bit Stream or PCM will have no affect on the audio for your speaker system since your speakers can only decode analogue audio anyway. I.e., these settings only change the type of output that is sent over the digital outputs on your player, which would not be connected to anything going by what you mention. In turn, this also means that changing this setting will have no effect on the audio / video sync either while playing. This setting also has no effect while recording, regardless of the type of speakers that are connected.