PCM is basically uncompressed audio, and thus the best quality you can get.
If you're using an optical or coax connection, it is limited to stereo (2.0) when outputting PCM, but can output 5.1 via Dolby Digital or DTS - but those are compressed formats. So with cheaper devices, Dolby/DTS might be better if you're wanting multichannel audio. Over HDMI, you are not limited to stereo audio when outputting PCM though.
Personally, I don't find virtual surround to be much use. It can certainly make the soundfield wider, but often reduces the quality of the sound, and you sometimes get very strange positioning effects.
The only sound bars I would really consider for multichannel sound are the higher-end Yamaha Sound Projectors, which have an array of drivers used to direct the sound around the room. That's well outside your $400 budget though.
Personally, I prefer a 2.0 setup with bookshelf speakers to using a sound bar. You get much better stereo separation and generally higher quality speakers for the same price.