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i was looking into this a little bit for my brother who's considering picking up a BD player.

PS3 does NOT decode (if that's the correct term to use) Dolby TrueHD but it does decode DTS-HD.

It decodes the audio and then streams it to your receiver PCM (?). I read somewhere that many receivers (maybe the ones older than 2008) does not decode DTS-HD or Dolby TrueHD so it is up to the BD player to do it.

So, ps3 is actually pretty cool in that it does play HD audio and video. I'm also not too bothered by the firmware updates that are required because it's just making the experience better (BD 2.0 and DTS-HD being new additions).