A Brief History of Surround Sound
Dolby Surround - the original. A four speaker, three channel setup. Two speakers in front, two in back. The front channels are full range and discrete (recorded separately). A mono, limited bandwidth (200hz-7Khz, I think) rear is sent to the two rear speakers. No one remembers it because it suxored.
Dolby Pro Logic - adds a center channel to Dolby Surround. The signal is matrixed from the mono information in the front left and right channels. The intended effect is to widen the "sweet spot" - the area in which optimal image placement is acheived. Things are looking up.
Dolby Digital (originally AC-3) -
Now we're cookin'! A system in which
up to 6 discrete channels can be used. The sixth channel is the .1 (the LFE channel
Low
Frequency
Effects, this refers to the fact that this channel handles only sounds below 120 hz) in 5.1. The rest of the channels are full bandwidth - meaning yes, large rear speakers can be beneficial.

Remember, DD doesn't
have to use all 6 channels - that's why you'll see DD 2.0, 4.0 (if more channels are not needed), etc. The level of control afforded by being able to pan sounds in any direction creates a
much more realistic effect. This is the one you want, kiddles.
DTS - Actually the
original fully discrete surround system it is similar to Dolby Digital in channel arrangement, but uses less compression and a higher bit rate which DTS claims provides superior sound quality. But as computer guys will know, a more efficient codec will provide similar if not better results with less data.
Dolby Labs has some interesting things to say about that.
There are some other, lesser formats out there (THX EX and DTS:ES) but they're hardly worth mentioning.
