My setup: Onkyo TXSR-805 receiver. Panasonic TH50PZ77U. Soon, a Blu-ray or HD-DVD.
My question:
My understanding of the benefits of bitstream output compared to LPCM are clouded. I understand, according to Onkyo, that no current HD/Blu can output bitstream audio to the receiver through HDMI 1.3 for receiver-onboard decoding (this, according to their site, which might be dated...). Given that I've seen a Pioneer BD, Toshiba HD-A35, as well as a firmware-upgraded Samsung BDP1400 that say they support bitstream output, I'm curious as to what benefits either format provides?
Internal decoding of Dolby TrueHD through LPCM is currently possible and only requires HDMI 1.1 (>35.5Mbps), which confuses me. Why does external decoding in my receiver require HDMI 1.3 and only 18Mbps (source: http://en.wikipedia.org/wiki/Dolby_true_hd)?
I guess it comes down to this: which format is better? LPCM or bitstream output to external decoder? If the question doesn't make sense, I'll adjust later.

So if LPCM is uncompressed, this should be better, yes? Also, is LPCM always 2.0 or can it be 5.1/7.1/8.1 like the bitstreams (or is that waaay too much bandwidth)?
Also, I'm curious: my receiver says "Multi-channel input" when LPCM is selected. Does this indicate that LPCM is analog, making bitstream digital and therefore, better? This crap is confusing.