Just got the PS4 and watching some Bluray movies on the thing. I noticed that my receiver doesn't say "Dolby HD or DTS HD" when outputting the higher bit rate audio streams. For the PS3 fat-it outputted in linear PCM and decoded those signals so my receiver just had "multichannel in" showing. Does anyone know if I'm doing something wrong? No big deal if I am getting higher quality codecs but want to make sure.

You can choose what kind of audio decoding you want in the settings. Linear PCM, Dolby HD, or DTS HD are all available choices.

When playing the blu-ray press options on the ps4 remote. There will be an audio option to the right. When you click on it choose bitstream. Your receiver will then decode the dts master audio or Dolby true hd tracks.

You don't want bitstream. You want what you have. If you have HDMI, the PS4 decodes the audio to multichannel PCM and sends it to the receiver. The receiver has no idea if the PCM it is receiving started out as PCM, DTS or DD.

The PS3 was the same way.

Multichannel PCM transport is superior to bitstream.