Proper configuration for 5.1 surround sound?

I have a 4th-generation Apple TV hooked up to an Onkyo TX-SR705 surround receiver, and am having some difficulty configuring it properly for surround sound.

The receiver supports Dolby Digital, DTS, and THX and has a "Direct" mode that supposedly just faithfully uses whatever signal it gets. When everything is working correctly with the input signal, that seems like it produces the best results (vs. the other modes like THX or "Movie" or whatever).

If I set the Apple TV's audio setting to "Dolby Digital 5.1" and use that Direct mode on the receiver, I get decent results: Stuff from iTunes, Netflix, and Plex all comes through in good-sounding surround, but some apps like Syfy are in stereo.

But if I set the Apple TV's audio setting to "Best Quality," which seems like it ought to be preferable, everything ends up in stereo. I can switch the receiver over to an explicit surround setting like "Movie" or "THX," but it doesn't sound as good and I suspect it's just doing what it can with a stereo signal, or reverting to Dolby Pro Logic or something.

For starters, I'd just like to understand what's going on. The situation when set explicitly to 5.1 would suggest that some apps are generating surround signals and some aren't (like Syfy). But if that's true, then why does the Best Quality setting give me stereo across the board? Shouldn't it leave some apps (iTunes in particular) unaffected?

Thanks.