A little note on something related to my earlier post.
By default VLC's Dolby decoder follows Dynamic Range Compression (sometimes called DRC) encoded into AC3 files. While this is great for TV's built in speakers and the tinny PC speakers that came with your Packard Bell, that isn't optimal for THX certified home theater systems.
Thankfully it's easy to fix the issue. The following instructions are with respect to VLC 0.9.6.
1. Start up VLC.
2. Click Tools, then Preferences.
3. At the bottom of the Preferences screen, click All.
4. In the left list, click Input/Codecs, Audio codecs, then A/52.
5. Uncheck A/52 dynamic range compression.
6. While you're there, click DCA (stands for DTS Coherent Acoustics, the DTS codec used in DVDs, not to be confused with the Theatrical DTS codec) in the left list, and uncheck DTS dynamic range compression.
7. Click Save.
Now you can enjoy your HDTV/DVDs with a dynamic range you didn't think was possible!