You're right, the receiver generally does the AC-3/Dolby Digital decoding. Folks who don't have a receiver with an on-board Dolby Digital decoder, but with ones that say "Dolby Digital Ready" can opt a DVD player with its own DD decoder, saving them from having to buy a whole new receiver. So as long as you have one DD/DTS decoder, you'll be fine, you don't need one on both components.