We were both sort of right:
With system software v 2.00, if you’ve got an AV Receiver without HDMI PS3 can convert multichannel SA-CD to multichannel DTS for you and feed it to the optical digital output. If you disable DTS out it will output PCM stereo, also during multichannel SA-CD playback. The output frequency is 48kHz.
When I was at 2.0, I always had DTS enabled, so I didn't realize you could force it to stereo by turning off DTS. But it was still only 48KHz downmixed from mch DSD, so never hi res PCM. I think that would have violated Sony's own SACD licensing agreements.
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