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That's a lot of stuff...

The laser is a narrower band than former red lasers, so yes it is more sensitive.

No, because I watched House of Flying Daggers, which is also Mpeg2 AFAIK, and I had no problems with it.

Pulled it down last night, took only 5 mins.

Ahhh, I see. Will have to check that out then...I want to play the new characters. I figured it was just busy, but that makes sense :)

Tried to download 1.54 last night but it was SLOOOOOOW. Took 1hr to reach 15%, then I got tired of it and shut it off. Was the update large?

I had The Prestige do a long pause on me once early in the film, but after that it was OK. 1.51.

I just used a memory card from my camera and put the update on there, plugged it into the reader in front and it worked fine. Just have to put it in the folder, same as on a CDR. Quick and easy.

The PS3 does not have multichannel analog outs, so 2ch PCM is what you will be limited to.

Well, I tried Kingdom of Heaven which also has a Master Audio track via optical and it sounded great. I guess that is why I've never seen that problem, since I always just use the PS button to go back to the menu or turn off the system when I am done watching.

What version of firmware do you have?

Just a little tip, just turn off the controller while watching. :)