The "Surround Mode" function in the setup menu is of limited purpose, in my opinion. I prefer to use the surround mode buttons on the remote to select the preferred mode when a certain source format is playing. The Model 990 remembers these preferences separately for each input.
Given that, what is the difference in selecting 5 STEREO, BYPASS, or PLII MOVIE? It seems like 'bypass' would let the unadulterated 5.1 audio signal come through as the director intended, and the other settings would apply some kind of possibly-unwanted coloration.
Each mode provides different surround processing. The manual explains these modes very well, but here's a quick summary of the ones you mention (there are a lot more, depending on the input signal):
Bypass: This mode is only available with stereo modes, and it is really best suited for stereo analog inputs (which then "bypass" analog-to-digital and digital-to-analog conversions).
5 Stereo: This mode expands a stereo source to five speakers while retaining the stereo source. Left channel is copied to left surround, right to right surround, and a combined signal goes to center.
PLII Movie: This is Pro Logic II (Movie). It is a Dolby program that generates a five-channel signal from stereo sources.
Note that all three modes you listed are only available when you have a stereo source playing, not a 5.1 source. They are also modes that suggest you have a 5.1 speaker setup, as there are other modes available for 7.1 setups. As a result, when a 5.1 source is active, you will not have many choices available. You will have Dolby Digital or DTS (depending on what the 5.1 source is), Upsample, and maybe a stereo downmix mode or two. The "bypass" mode won't be an option and isn't applicable.