If you play a 7.1 track through an AVR that is set up with a 5.1 speaker configuration, the AVR will simply mix the rear channels with your surrounds. You don't lose any sound. Of course, you do lose the potentially better spacial definition that 7.1 can provide IF you have a properly set up 7.1 system. As noted in another reply, a poorly set up 7.1 setup can screw up your sound. Unfortunately, many 7.1 systems are forced into areas where they are not appropriate because most room configurations don't easy allow speaker placement directly behind the listener's seating position (often because a sofa is backed up against a wall). 3 feet distance is generally considered the minimum. If you get closer than they, the rears may be emphasized too much compared to the other speakers.
That's what I always thought. Someone in the Roku forums was complaining about M-Go Vudu not being able to downmix 7.1 tracks to 5.1 for some reason....
