Have you done the auto setup with the supplied microphone? Once that is done, you can just select the AUTO surround mode. The receiver will then select the correct surround sound mode based on the source of the audio. Of course you can always select the mode that you think sounds the best.
On mine, I really like the Dolby ProLogicIIx cinema mode for watching DVDs and regular TV. If a DVD has a DTS track, that's what I select on the DVD and the receiver automatically selects that surround mode. For two channel audio such as CD's, I put it in Pure Direct mode, and for sports I really like the 7CH stereo mode.
