I currently have a Panasonic DMP-BD55 Blue Ray player that I am sending 7.1 channel outs to the Outlaw 990. My question is about PCM and Bitstream settings on my blue-ray player. Am I correct in thinking that I must use the PCM setting to pass along the lossless audio formats through the 7.1 outs to the 990 since the 990 can't decode the newer formats. I see alot of info out there about using specific settings if using a receiver with HDMI capability but nothing for those of us using 7.1 analog. Please help.

The 7.1 analog output should not be affected by PCM/Bitstream settings. It will always decode. The PCM and Bitstream options only apply to the digital outputs (coaxial/optical or HDMI).