Do you really know how your Dolby decoder really works ? This may help you in understanding the dolby decoding process. Three decoding processes are mainly used nowadays :

Dolby Surround Pro-Logic - Analog
Dolby Surround Pro-Logic - Digital
Dolby AC-3

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-- DOLBY SURROUND Pro-Logic (Analog)

Many of the "stereo" soundtracks used for your laser video discs and VHS tapes have been encoded for surround since the mid-70s. This is because the encoding for "Dolby Stereo" (Dolby Motion Picture matrix, or simply Dolby MP) is the same as for home "Dolby Surround". It is easier for video producers to simply transfer the encoded signal from the theatrical audio master (or release print) to the video master, than to decode to simple stereo or go back to the pre-encoded audio elements and remix.

Pre-recorded "surround" programs have Dolby Lt and Rt composite signals in the left and right stereo channels. To extract left/center/right/surround, you need a Dolby Pro-Logic Decoder using either an analog or digital decoding process.

Analog Decoding process is exclusively based on analog decoding chips such as the Analog Device SSM 2126A. Those circuits manufactured under license from Dolby Laboratories were mainly used in the early 90s and are still used nowadays in midi systems or low quality amplifiers because of their low price. All the analog devices required to process the signal are gathered on a small chip.

Such decoding process works fine but do not provide excellent results concerning overall noise or the crosstalk between front and surround channels. An explanation of the circuit is shown on the figure. The general functionning is obvious to understand. The center channel is created by adding the right and left channels, while the surround channel is based on the substraction of the front channels. An active MP decoding matrix analyses the soundfield for signal dominance, and focuses the sound toward those outputs. It allows high non linear dynamic response of the different channels so that a small amount of out-of-phaseness signals in the main will give high surround signals and reduced front signals. About 30 dBs of separation between any two channels may be reached using analog techniques which is quite sufficient for movie listening. However this simple active matrix using signal comparison and dynamic amplification cannot solve three main technical problems involved in the decoding process:

Decrease the croostalk and diaphony as much as possible
Reduce the amount of noise on the rear channel
Use the Haas effect to emphasize the surround effects

The crosstalk is due to errors in relative phaseness or amplitude between the two main stereo channels. This occurs when recording or reading the original two stereo channels. This will only affect the surround channel which is much more sensitive to erreors in phaseness than the other channels. Crosstalk occurs at high frequencies because the ears then detects more easily the source of the sounds. As a result the frequency range of the surround channel is limited to 100Hz-7kHz at -3dB. nevertheless please note that not all decoders or amplifiers provide this limitation in bandwidth. Indeed this is amazing but most of them simply use the original

The noise on the rear channel is due to two parameters. Firstly the white noise naturally present on non digital supports (video K7) is occuring out-of-phaseness on both R and L channels and is more likely to appear amplified on the surround channel. Secondly the delay time often generated by analog devices on such analog decoding process will introduce a certain amount of noise as well amplified afterwards. Consequently the decoder uses a modified Dolby B type noise reduction circuit (5dB, versus 10 dB on audio cassettes) to reduce the overall amount of noise. Many other AV makers offered the "TimeLink" option which means that the process is analog but that the surround channel is digitized and the delay time is realized using RAMs. This digital time delay really improves the noise level on analog decoders.

The delay time is added to the signal sent to the surround channel so that listeners far back in a movie theatre won't hear the surround signal (esp. simulated echo) prior to the original front channel sound. This also ensures that any "front" sound that "leaks" into the surround channel is heard after the real front sound, improving clarity (the "Haas" effect). Exactly the same process was adopted for home applications of Dolby stereo to avoid distracting sounds from the rear to keep your attention out from the action of the movie. The delay time varies from 15ms to 30ms.

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-- DOLBY SURROUND Pro-Logic (Digital)

Many of the "stereo" soundtracks used for your laser video discs and VHS tapes have been encoded for surround since the mid-70s. This is because the encoding for "Dolby Stereo" (Dolby Motion Picture matrix, or simply Dolby MP) is the same as for home "Dolby Surround". It is easier for video producers to simply transfer the encoded signal from the theatrical audio master (or release print) to the video master, than to decode to simple stereo or go back to the pre-encoded audio elements and remix.

Pre-recorded "surround" programs have Dolby Lt and Rt composite signals in the left and right stereo channels. To extract left/center/right/surround, you need a Dolby Pro-Logic Decoder using either an analog or digital decoding process.

Digital Decoding process is exclusively based on digital decoding LSICs (large scale integrated circuits from Sanyo, yamaha or Analog device). Those circuits manufactured under license from Dolby Laboratories as well are mainly used nowadays but are higher cost devices. Such chips integrate a DSP (digital signal processing) which replace the analog Dolby MP matrix. The main improvement is that both R and L channels are digitized via analog to digital converters and then processed without added noise or phase errors. Consequently output noise and crosstalk are well reduced, and high dynamic gain and separation may be reached without any lost and distortion from the incoming signal.

The DSP provides the same process as the MP matrix (see figure above) but no analog devices are required. You can go here for further informations on DSP. The program or processing algorithm which process the signal samples from the converter is stored in ROM. Each sample is compared to the previous and following ones according to the Program. Then it is sent to the right channel depending on the resulting process. The delay time introduced in the rear channel is all digital (the samples are added in a RAM and the time they spend in the RAM corresponds to the delay time). Volume and balance levels are also digitaly controled and do not involve any other components. Finally since the samples do not carry any phase, no errors are created by the decoder and the crosstalk is reduced whatever the incoming signal source is (CD and other). The dynamic separation between any two channel is improved as well (about 45dBs) and high dynamic power is available (about 100 dBs) since the digital processing does not engender signal losses.

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-- DOLBY DIGITAL AC-3

Recently, several discrete, or "5.1 channel" surround systems have been fielded theatrically. These use a compressed digital audio format, either on the 35mm print or on separate CD-ROMs, to provide increased channel separate. One of these schemes (AC-3, aka Dolby Stereo Digital), threatens to invade the home.

This was achieved by the recent release of fully integrated AC-3 decoders in current amplifiers. AC-3 is a complex digital algorithm used to compress data into a digital flow less than PCM (CDs). As a result full digital decoding is involved. The decoder actually behaves like a DSP but the data input is either analog (for dolby pro-logic mode) or digital (PCM or AC-3 from LD and CD players). It means the quality of the output signals reaches a very high level towards noise and distortion and aliasing.
The decoder decodes the input digital AC-3 data by following the decompressing software. Currently two decoding chips are available, one from Zoran and another one from Motorala. Both provide a very good transfert from compacted to discrete channels. Amazingly the very high compression rate does not affect the overall sounding qualities provided that large digital to analog converters feed the pre-amplifying stage. Consider that 18bits converters and multiple oversampling are the basic requirements to give impressive HiFi results.
The advantage from AC-3 amplifiers is that you are sure to get the best of your LD in all cases. Indeed if you luckily bought a LD with a PCM and AC-3 output, you will listen to both Dolby surround and Dolby Digital in extremely good conditions. And Dolby Prologic is impressive as well when the decoder is directly feeded with a PCM signal since all the analog stages and different A/D or D/A conversions are short circuited.
I advise you to have a look to this technical note related to the new Yamaha DSP-A3090 AC-3 amplifier.