First, you need to "calibrate" the speakers in the Speaker Setup Menu (pg 28). You set the individual speaker volumes, distances and crossover setting. Measure the distance from each speaker to the seating position or "sweet spot" and enter the measurement in the setup menu. Use the Test Tone to set the speaker volumes either "by ear" or with a Sound Pressure Level meter ($50 from Radio Shack). Adjust each speaker volume with the CH LEVEL button until the either all sound about the same volume (by ear) or measure the same (SPL meter). They should not all be set to "0". With your Boston speakers the crossover setting should be set to 120 hz.
On the display, you're looking for Dolby Digital, DTS, TrueHD or DTS Master Audio. ProLogic or Neo:6 is a fake surround sound derived from a two channel stereo source.
With the Surround < > button you should select Standard Playback. With a stereo source, like a two channel movie broadcast in Stereo or a music cd, you could select ProLogic or Neo:6 to slmulate surround sound.
The Input Indicator should be DIG not PCM or ANA. Check the Bluray players Audio Output. It should be "Auto" or "Bitstream", not PCM. With Bitstream the receiver decodes the audio signal, with PCM the player does the decoding. It looks like the DTV is set properly to 5.1.
In a BluRay discs (like Avatar) Audio Menu you can have several audio choices. Dolby TrueHD and DTS Master Audio are the best followed by Dolby Digital Plus and DTS High Definition, then Dolby Digital and DTS, then Stereo.
When watching a Dolby or DTS 5.1 movie via BR or DTV you should see a RED Dolby or DTS on the main display. TrueHD or Master Audio on a BluRay disc. A white ProLogic or Neo:6 means your receiver is getting a stereo signal from the BR player or DTV receiver.