The weird thing is that through the coax input the Marantz 4200 flashes up as 96Khz on the amp display.

However the amp lets me do DPLII on this, and in the manual it says you can't apply surround processing to 96khz signals, but only have them in stereo.

This leads me to believe that the signal is infact only 48K or so, thence cd quality. It still sounds good though......I wonder how much better the 6 analogue sound would be........

What you are getting out of the digital output (coax or optical) is a high resolution stereo signal. It is not CD quality, but quite a bit better. The issue with getting high resolution surround sound through the digital connection is that there is simply too much information for current standards in the digital outputs. Several companies (Meridian, Denon, Pioneer) have developed proprietary digital links allowing the passing of the full high res surround sound signal from thier players to their receivers. Soon, I think a standard for this will be developed and implemented widely. As of now, we have to keep the six analog cables for DVD audio and choose between the onboard decoder and the receiver decoder for the DD/DTS soundtracks on DVD-Videos.