Hi, I own a home theater system that allows for 7.1 dolby digital.  A couple of weeks ago I moved, so today I hooked everything back up and now I can't select 7.1 from the ps3 audio settings. I am certain that was what I was running before I moved. Is there anyway that sony took away 7.1? If anybody can help I'd appreciate it.

Have you checked the audio settings to see if the 7.1 box is checked?

for some reason that option is no longer available in the ps3 audio settings.

They did change how the audio works with the new update.

But I think I read somewhere that the PS3 Slim was now able to do full 7.1, suggesting that the fat PS3 cannot.

In any case, 7.1 isn't all the different from 5.1 and most movies and games do not support it.

I think you're mixing up things slightly, as the fat PS3 outputs 7.1 alright.

What changed is that two audio formats (DTS HD MA and Dolby TrueHD which can be 7.1) can be output in their original compressed form (bitstream) by the slim if you tick an option, letting your home theater uncompress them. In the fat those two formats were always processed by the PS3 and the home theater received the uncompressed LPCM stream (with the same channels), because the old version of the HDMI chip couldn't bitstream them directly.

As for the problem of the OP:

as far as I know Dolby Digital proper is a 5.1 format, did you mean DD+ or Dolby TrueHD?. Anyway, select a 7.1 PCM output in your PS3 audio settings and your console will output 7.1 channels in uncompressed form.