Home audio & video: How to get 5.1 Surround Sound on Time Warner HD?

How to get 5.1 Surround Sound on Time Warner HD?

I connect:

1) the Time Warner STB single HDMI A/V out to an HDMI in on my Sharp Aquois LCD TV
This gives me simulated surround sound from the two speakers on my TV

2) the optical digital audio out from the STB to the optical audio in on audio Channel 1 on my receiver
With this, I experienced up to 4-channel surround sound thought the speakers connected to the receiver. I've never experienced 5.1 Surround Sound through the HD cable!?!

3) the coax digital audio out from my LiteOn DVD player to audio Channel 2 on my receiver. I connect video from the DVD player to the TV using composite video.
This setup lets me watch video and hear 5.1 Surround Sound on 'Pearl Harbor'. Once pecularity of my setup is that I have to set up my LiteOn DVD player to output a BitStream audio signal; instead of PCM audio. When I had PCM audio selected by mistake, I get no sound. In addition, I have to press a button on my receiver to switch to decode Digital Audio versus Analog audio.

I assumed my receiver can only handle BitStream audio signals and tried to look for a way to make sure the Time Warner Scientific American STB puts out BitStream audio format, but have been unable to find that option using the remote they gave me. Can someone help?