Well here was my results I was watching a movie on my 722 that had 5.1 DD.
Revue on 3.1 Userdebug
Optical directly out of 722 - DD shows on receiver - all speakers have sound
HDMI out of revue - PCM on receiver - only L/R speakers have sound
Optical out of Revue (Dolby Digital setting) - DD on reciever - only L/R had sound - choppy sound also
Optical out of Revue (PCM setting) - Stereo (PCM maybe?) on receiver - all speakers had sound due to Pro Logic being applied.
Are you noticing any delay/sync issues using this option??