I'd disregard the option in the input menu - that's basically what I do with my 990, and the two have similar menu layouts.

The first time that you have a program playing that you want to use Pro Logic II-Movie for (whether PCM or Dolby 2.0), use the Dolby button on the remote to select it. The next time a program plays that is using the same type of signal (PCM or Dolby 2.0), the 970 will remember to use PLII. It will remember separately for PCM and Dolby 2.0, so depending on your cable/satellite provider you may have to go through this process twice.