I just want to clarify a few things, and see if I understand this correctly.
First of all, everybody should read this paper from Dolby explaining the concept of the LFE channel and how it should NOT be confused with the subwoofer channel:
http://www.dolby.com/uploadedFiles/zz-_Shared_Assets/English_PDFs/Professional/38_LFE.pdf , even though I'm pretty sure most of you guys here already understands this.
Now, as I understand it, MC has all the options for everybody to route (or not route) the bass however they like.
For those with a (not ancient) home theatre receiver, the receiver itself has adequate speaker levelling, delay settings and bass management and thus MC's Room Correction is not needed (of course you still may wanna let MC handle it for various reasons if you know what you're doing, but the receiver is usually easier to set up). Also, in this case if you upmix to 7.1 (and optionally stereo to 2.1), you'd wanna set the subwoofer to silent to get correct reproduction. And you leave Room Correction unchecked in MC.
As a side note, I believe the label "Room Correction" is wrong and misleading, since room correction usually refers to frequency/timing correction to compensate for the effect the room has on the sound, like room nodes etc. "Delay, Levels and Bass Management" or "Speaker Management" is really what it is, and has very little to do with actual room correction. Modern receivers work like this (correct me if I'm wrong):
When you select a speaker as "small", the bass below the crossover frequency is removed from that speaker and redirected to the subwoofer. The speakers set to "large" in the receiver's setup plays their bass itself. Usually the receiver also has an the option to double the bass from ALL speakers to the sub.
The LFE channel is MADE for the subwoofer, so the LFE channel is, like Matt says above, just passed on to the subwoofer. The crossover isn't for taking away high frequencies from the sub, it's for moving bass from the small speakers to the sub below a certain frequency. The LFE channel contains nothing above 120 Hz, but it may contain sounds above the crossover that is still intended for the subwoofer (and if the receiver removed sounds above the crossover it would not play the movie as the sound mixers intended). The LFE channel may or may not be routed through a low pass filter, depending on the receiver. So making MC make a LFE channel with full frequency is not something you want, unless you use the subwoofer's own crossover filter.
I myself use the above option, let MC upmix to 7.1 while leaving stereo alone (mix stereo to 2.1 with sub set to silent) and let the receiver handle the bass management. This way I don't have to turn on and off the bass management on the receiver when listening to other sources, like FM radio or satellite receiver. I plan to incorporate FIR filters made with Audiolense when I get around to it, and then I'll have to let the FIR filters or MC take care of bass management, since the bass management will have to be taken care of before or during the sound correction.
Then you have those who connect the computer's sound card directly to a multichannel power amplifier (or via an external DAC/sound card), and lets MC handle levels, delay and bass management. MC's bass management also lets you choose exactly which bass goes to which speaker as I see it. To get correct reproduction, also here the sub output should be set to silent in Output Format for signals that don't have a LFE channel.
I agree "Silent" should be the default choice.
Then you of couse have those who bypass all MC's DSP options and output the untouched audio track (DD/DTS or whatever) to the receiver or surround processor and let it handle decoding, upmixing and everything else. That's also an available option in MC.
So what's missing? With all the settings right for correct reproduction, is the bass still too loud?
As I said above, please correct me if I have misunderstood something, as I'm not a professional, just an enthusiast who gets most my information by looking it up on the internet and discussing with knowledgeable people on forums like this (and of course real people in the real world
). And I hope this post doesn't confuse people even more
EDIT: Found another great article that goes into the deep of bass management:
http://www.ultimateavmag.com/content/bass-management-and-lfe-channelThis article suggests that the LFE channel mostly runs through a low pass filter, but not always, and also that any movie might contain full frequency sound in the LFE channel, so therefore it would generally be a good idea to apply the subwoofer's own low pass filter, if it has one, for the safety of the sub at high volumes. Unless you test and verify that the receiver actually has a LFE low pass filter (should be doable with MC). Just set it well above the highest crossover frequency of any of the other speakers, so the two filters won't interfere with each other.