This "7th channel" misunderstanding is helped along by manufacturers who do nothing to dispel the idea of "7.1" channels. Currently, there is no such thing. THX decorrelation applied to the two monophonic rear channels results in a "kind" of 6 and 7th channels, but they are not true channels because they are not capable of proper steering, and each has the information the other uses, but at different times. Right now, the most channels are supplied by DTS ES Discrete, which has 6.1 discrete channels as opposed to DTS Matrix, Dolby EX and THX EX which provide only 5.1 discrete channels and a 6th matrixed channel derived from the left and right surround channels. THX decorrelation was first implemented in Pro-Logic decoders using THX circuitry some time ago. The difference between a discrete channel and a matrix channel mainly concerns separation. Discrete channels, as in Dolby Digital 5.1 or DTS 5.1 or DTS ES Discrete 6.1 have separations of around 70-80db. Matrix derived channels (such as all the channels in old Pro-Logic, or Dolby EX's centre surround channel) are only separated by about 35db (Circle Surround, another matrix method is about 40db) so you hear "bleed" in these channels from the ones they were derived from and vice-versa. Interestingly, all matrix circuits are NOT created equal. Depending on the processor, some matrix channels in some systems are not as well separated as in other systems. There are various schemes out there for decoding matrixed channels. Dolby and DTS provide "flags" in the software to help with the correct "steering" of the matrix channels. But there has been some problems with these flags and THX EX (THX's version of Dolby EX). Dolby stopped using flags and I don't know if they've started putting them back in yet. What it means is that these channels can be derived from any multichannel source, whether there are flags embedded in the software or not. Some of the schemes like Circle Surround or Lexicon's Logic 7 can even derive multiple channels from 2 channel PCM sources, but that basically resembles the old Pro-Logic method and all those channels have very weak separation. If people want to have "lots" of channels, Circle Surround (and probably any matrix decoder, even old Pro-Logic receivers) claims to be able to derive Sony SDDS information (8.1 channels in theater but not available to consumers) from Sony DVD movies. There was an article in WSR a while back from the president of Smart Industries (Circle Surround) who claimed that the full 8.1 SDDS channel information is mixed into some standard 5.1 Sony movies, only needing to be extracted by a decoder like his. Of course, if it is true, you don't get 8.1 discrete channels like full theatrical SDDS, but you would get 8.1 channels consisting of a discrete left-centre-right front channels, left right discrete surround channels, one matrix rear centre channel and two matrix front left and right channels, higher up than the standard discrete left and right front channels, kind of like Yamaha's pre-existing system. To this end, you can interpose a Circle Surround decoder between any two discrete or maybe even matrixed channels to see if you can derive differential information. Yamaha also uses this method with it's flagship receivers to create a 7th and 8th channels positioned wider and above the front left and right speakers. Parasound's (discontinued?) CSE 6.1 add-on decoder which allows older 5.1 gear to have 6th and 7th monophonic channels also has outputs for two channels positioned on the ceiling about mid-point in the home theater. This, they say are the two channels Dolby elected NOT to provide for real theaters (owing to cost of extra speakers) when they implemented their Dolby EX scheme for movie theaters. I think "The Phantom Menace" was the first theatrical film to contain Dolby EX flags. So it's an interesting time for home theater and you can experiment with extra channels if you buy things like Circle Surrounds Jr. units and use them between your discrete channels. Theoretically, though I don't know exactly how this would work out, you could have a situation where you have 5 or 6 discrete channels and matrix channels in between or above or below those channels. This might result in a home theater environment where there are 10-14 or more channels. One method, "Ambisonics" apparently has produced a 10 channel home theater system, but they are all matrixed channels so it's kind of like a "super" Pro-Logic, not IMO preferable to a discrete system with fewer channels. The thing that is the crux of the whole issue is this; Which matrix channels are truly channels (albeit with reduced separation compared to discrete channels) but are CAPABLE of providing accurate steering? In other words, I know that the 6th rear channel in a DTS ES or Dolby EX or THX EX system provides true, direction behaviour (I've tested it) but will additional matrixed channels derived by interposing a decoder between discrete channels provide real steering of sounds? THX EX's decorrelation for the 6th and 7th rear surrounds does not provide this. It only provides a "difference" designed to fool the ear into thinking there are 2 channels. This IMO, is no more than filler or dipole speaker-like diffusion. It does serve a purpose (designed for larger listening environments where one speaker would not serve the each seat well) but in fact, it is not much different than simply taking the 6th channel and splitting it to multiple speakers, as is done in theaters with surround channels now. In fact, Dolby only recommends splitting the 6th channel into two speakers in large listening environments, probably to prevent a dilution of the directionality the 6th channel provides. But further experimentation with different movie soundtracks and separate matrix decoders is needed to see exactly what is possible as far as extra matrix channels goes. Provided separation can be kept to at least 25db (about the same as stereo on old vinyl records) and PROVIDED the information is not simply diffused sound, that it's truly directional or not clealy audible (important!) in the standard channelsthen these extra channels should be sought out to provide a more accurate more enveloping home theater environment.