If I set up the Output Format to "Source Number Of Channels", will MC now output stereo for a stereo input and 5.1 for a 5.1 input . It sounds like it should. (maybe a dumb question)
Or do I have to keep swapping the output format in the DSP depending on whether I want 5.1 for a movie or stereo for audio output.
Also is there any tag that tells me if the video audio content is 2 channel 5.1 channel etc.
You can only push 5.1 through spdif if it is Dolby encoded, or in a dts file itself. Setting MC to source channels will not work over optical, you'll either get no sound or garbled sound (I get the latter). If you check the encoding to output Dolby digital, it will send readable data (2 channel gets up converted to 5.1)
The easiest way to do this IME is make a zone for "multichannel optical" and one for "2 channel optical", then set their output accordingly. My AVR (and probably most) instantly recognize the Dolby signal and therefore I don't need to touch the receiver, just send to the correct zone
I only listen to actual 2 channel over headphones, so I made some zones there. If I use my hi fi I always listen multichannel, using either JRSS mixing or one of the receiver presets (so I've made zones for each of those settings as well)