Your DVD player and Cable box digital out is not properly setup, they are both likely on PCM, they need to be set on bitstream or Dolby Digital.
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I am currently using a Yamaha as a pre/pro. Here are some basics. As dedwards said check the DVD player to make sure its set to dolby digital anhd not PCM.
Your 2 questions are basically part of one. Your 4600 can "auto" select between analog, dolby digital 5.1 and DTS. PLX is Pro logic( you would set for most all of your VHS movies). PLXII- adds rear surround channel.(Presently you have a 5 speaker set up so this wouldnt effect you.When you refer to the rear speakers, you are actually talking about your left and right surround speakers. If you added another set of surrounds you would have rear surrounds.) REMEMBER-you aren't always going to hear sound from the surrounds, only when you have encoded material that calls for it. Example, if you played a Music DVD such as Eric Claptons crossroads. You will hear sound due to the fact that is the way the material was engineered.
Which setting you pick depends on what material you are listening to and what you think sounds better.
Look at the DVD you are playing. it will say how it is encoded(dts,dolby digital, etc). Try each one see which sounds better to you. From your dvd menu pick which format first(lets say DTS) then(if you dont have the yamaha in "auto" select mode) set the receiver to match.
BTW- once you get a sub. set your mains to large, center to large, and surrounds to small. This will send the bass signals to your sub and give you much better "surround sound" quality...
hope this helps.....dzigon