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Home Theatre / PS3 / 1080p tv optimum setup? -How to achieve best performance?

Hope someone out there has a little more exp than me...
TV - Samsung series 6 42"
PS3 - (with 120gb hdd)
Surround - Panasonic SA-PT860
Available cables 1 x £90 HDMI cable / 1 x £20 HDMI cable - plus optical and composite
How to connect what to what... and change which settings

THE EASY WAY:

-Hook up the PS3 to the Panasonic receiver with an HDMI cable.
-Use another HDMI cable to output from the receiver to the Samsung TV.
-Turn on the PS3 or do a soft reset (in standby mode with the power light red), hold down the power button for 5 seconds and it will beep twice and walk you through reacquiring the best audio/video signal available.

For video setup, and in the case of the Samsung series 6, it should say it is acquiring a 1080p signal via HDMI.

On the audio side it should say it will acquire it via HDMI in the following formats: Stereo, Dolby Digitial 5.1, Dolby Prologic II and DTS. However, it will not show uncompressed audio formats like DTS-HD as being available because that particular Panasonic receiver does not decode those signals (you would have to upgrade your receiver to a model with HDMI 1.3 and the ability to output uncompressed audio to do that).

THE HARD WAY:
-Hook up the PS3 directly to the Samsung TV with an HDMI cable.
-Hook up the PS3 to the receiver using the optical cable. -Turn on the PS3 or do a soft reset (in standby mode (with the power light red), hold down the power button for 5 seconds and it will beep twice and walk you through reacquiring the best audio/video signal available.

The difference between the EASY & HARD way is that the HARD WAY will give you a little better picture quality because you would be hooking up the PS3 directly to the TV which avoids any signal degredation or up/downconversion that the receiver would be doing if you hooked it up the EASY WAY. The audio quality would be the same in both scenario because the Panasonic receiver would still output the same audio formats (5.1, DTS, Prologic, etc.) when receiving the signal via an HDMI or an optical cable.

FYI I only called it the EASY way because it uses just one HDMI cable between the components and the HARD WAY adds an optical cable to the mix.

Also with the HARD WAY, you will have to go into the receiver menu and make sure the video signal is outputting via HDMI and that the audio signal is input from optical (if you leave both audio/video in HDMI in the receiver you will not hear any audio). Yet another reason it's called the HARD WAY.

So if you're a "signal purist" you might want to do it the hard way as long as your receiver plays nicely. If it doesn't then do it the easy way. And if you are a real signal purist, you're going to eventually get a new receiver to handle HDMI 1.3, uncompressed audio and component upconversion anyway, right?

G luck...

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