That BDT-210 manual is dreadful!

Digital Audio Output: I would actually lean toward any setting other than PCM. Presumably they are offering choices of bitstream and PCM for both menu entries (DD/DD+/TrueHD, DTS/DTS-HD). With an optical output, you're not going to get a TrueHD or DTS-HD MA signal anyway - but you will get the core DD or DTS track (which is encoded at the highest possible bit rate for either format), and that's probably going to sound better than a PCM downmix. By the way, check out page 39. It confirms that the options here are "bitstream" and "PCM" - and the table there confirms that you'll still get DD/DTS via optical when using the bitstream setting.

PCM Down Conversion: I don't think it matters that much. A receiver from 2001 probably won't support higher than 48kHz PCM, so "On" is probably a safe bet.

Downmix: Doesn't matter when using bitstream output. If there's a setting to disable this, I'd use that. If the only options are "surround encoded" and "stereo" (the only two that are mentioned in the manual), I'd probably use "surround encoded."

7.1ch Audio Reformatting: Also doesn't matter when using bitstream output. This one really only matters when using HDMI audio with PCM output. "Off" is probably a reasonable choice.

HDMI Audio Output: I agree that "off" is appropriate.