Well that should'nt be surprising that uncompressed sounds the best, compressed files will never sound as good as compressed files. That's simply the issue with compression, and the compromise it has on sound quality.
As for DTS, you have to understand that DTS is a encode decode surround mode, and the original file must be recorded in DTS for it to work. So as long as you have a disc that is encoded in DTS it should work when put in DTS mode. Not all discs are encoded in DTS.
Kevin
40 years high end audio video specialist
