1) I discussed this Difference in the FAQ and PRIMER- link in my signature.
Why is CD and TV so much louder than DVDs- Did I hook it up wrong? by Vince Maskeeper
http://www.hometheaterforum.com/htfo...17#post1201017
3) If you're using the 3 wire (red/White/Yellow)- you only have analog 2 channel sound, and are missing half the point of DVD. Connecting via COAX from digital out to digital in will give you 6 channel digital audio on DVDs with 6 channel soundtracks.
This is also covered in FAQ AND PRIMER, please read it.