Somebody better get me to the church on time. I hear them locusts buzzing abouts ...

Seriously though, congrats on the entre into multichannel. Once you start getting into the placement and calibration aspects of the whole setup, you'll have plenty to tinker with and at least now have an idea of how a specific soundtrack was intended to sound. For basic digital format decoding, you already have everything you need. The more advanced receivers are for the extended processing capabilities, better bass management, higher quality digital and analog circuitry, higher capacity output circuitry, better chassis isolation, or more flexible multiroom options.

Typically, if you switch the DSP processor off, the DD and DTS mixdown from 5.1 occurs in a standard proportion down to two-channel. The DSP processor is still active, but only does the basic processing and mixes it down for playback. Any "phantom" effect is not deliberately part of the mixdown or created by the processor.

The "phantom mode" is where you leave the DSP processor on and let it create a virtual surround effect. This is a more deliberately synthesized center or surround effect with two channels that occurs when only two-speakers are switched on through the setup menu. How effectively this mode is varies greatly by receiver. Some models let you independently calibrate the center and surround levels, even when playing in virtual mode with two speakers.