I have Panasonic TH42PZ700, PS3, Sky Plus HD, Marantz SR5300, 5.1 speakers. I've set up the Sky remote so it controls the volume of the Marantz (great that) , but I'd just like to sort out the PS3 connections.

PS3 has 2 audio outputs, HDMI and Optical Audio. If I set the PS3 to output to Optical, Marantz has to be set to Digi3 input (which means using original marantz remote which is a PITA) but I get magnificent 5.1 surround sound.

If I set the PS3 to output to HDMI into Panny and Panny to output digital optical audio to Marantz Digi2 then I get great stereo, but no surround. Am I missing a point here? Surely PS3 HDMI (with 5.1 selected) into Panny, Panny set to digital into HDMI 1 then out as digital audio optical out should give 5.1 into amp?

Marantz has 4 digital inputs 2 x optical, 2 x wired. My inputs are as follows

Digital optical 1 from Sky Plus Box
Digital optical 2 from Panny
Digital optical PS3 converted to hard wired Digital into Digital 3 - works well but manual select on amp.
Digital 4 from region free DVD

Thanks for any help,

Nick

It could be any one of several possibilities. Two spring immediately to mind.

The PS3 could feed 5.1 out of the Optical out and only stereo up the HDMI cable.

The TV could down mix a 5.1 audio feed it receives on HDMI to stereo which it outputs on it's optical out. Particularly if the TV only has stereo speakers itself.

It doesn't necessarily follow that what the TV receives on the HDMI socket gets thrown out of the optical out unaltered.

No point in connecting digital from Panny to amp and expecting full DD 5.1 - Panny cannot generate a 5.1 sound - you get this for your Sky viewing from the Sky HD box.
For watching TV on say, Freeview this connection would give you a stereo (or processed ProLogic surround) effect.

Rgds,
Scorp