On Blu-ray, there are 3 different sound formats that are common. They all have the ability to kick ass. Let us review:
Dolby Digital / Dolby TrueHD -
Dolby Digital (or AC3 as it is sometimes known) was first used in movie theaters on the movie Batman Returns. Dolby Digital is still used in movie theaters today, running at 320kbps for all 5.1 channels combined. These same 5.1 channels are available on LaserDisc (at 384kbps) and DVD (usually at 384kbps but can go as high as 448. Blu-ray tops this out at 640kbps for slightly better sound quality.
Dolby Digital Plus was mainly used in HD DVD where space was limited due to HD DVD sucking donkey balls compared to Blu-ray. It uses even higher bitrates and can encode up to 7.1 discrete channels. You'll rarely ever see this on a Blu-ray movie as there really is no reason for it to exist with TrueHD around.
Dolby TrueHD is a lossless compressed format. That means that it is compressed, but when uncompressed, the sound is the same as the original file before it was compressed. It can encode 8 discrete channels (or more) at bitrates around 18 megabits per second. That's over twice the video bitrate of DVD alone. Usually the sample rate is 24-bit, 48000Hz (CD quality is 16-bit 44100Hz), so Dolby TrueHD is a higher resolution audio format. If you do not have a receiver capable of this, DolbyTrueHD will "core down" into the regular lossy Dolby Digital automatically so you can enjoy the same 5.1 Dolby Digital you always have. This type of sound requires an HDMI connection. The PS3 decodes this and sends it out to the receiver as raw PCM whereas other players can "bitstream" it meaning the receiver does the decoding. Bitstreaming is preferred being that the receiver will likely have a better decoder than the player.
DTS / DTS HD Master Audio (DTS HDMA) -
Similar in concept to Dolby Digital, DTS was first used theatrically on Jurassic Park. It then worked its way into the home market on LaserDisc and DVD at slightly higher bitrates than its theatrical counterpart. The bit rates are usually higher than the comparable Dolby Digital format. DTS tracks also seem to be recorded louder, and most peoeple seem to think that louder = better. All it really means is that the source file the DTS track was encoded from was louder than the source track that the Dolby Digital was encoded from. Since I have done a lot of sound mixing myself and encoded both Dolby Digital 5.1 and DTS 5.1 from the same master track, I can tell you that there isn't a ton of appreciable difference between the two formats, though DTS is a bit better. DTS is not supported by as many receivers. DTS HDMA is the same concept as DolbyTrueHD, that is lossless compression and also "cores down" into regular DTS for people who do not have a fancy receiver. It usually uses the same 24/48 resolution as TrueHD, but the Blu-ray of Baraka has a resolution of 24-bit, 96000Hz which is twice that of most BDs. Can be up to 8 discrete channels. The PS3 decodes this and sends it out as PCM while other players can bitstream it.
PCM -
Raw, uncompressed sound. Like Dolby TrueHD and DTSHDMA, it is usually at the 24-bit 48000Hz resolution. Like the others, this is HDMI only. It can go up to 8 channels or more and 24-bit, 192000Hz. Very bandwidth intensive.
