SDDS 8-channel is regarded as the best sounding format for theatres. The only thing is that the SDDS equipment is very very flaky. Half the time the reader doesn't even work. uncJigga is right, SDDS is encoded at the very edge of the film, which also happens to be the part of the film that wears out the fastest. So you couple flaky equipment (and technicians who have software that barely works) and the soundtrack at the edge of the film, it becomes very difficult to even get SDDS to run half the time. For DTS there is timecode on the *inside* of the perfs, which takes alot longer to wear (we are talking hundreds of shows). I love DTS because it is very very reliable, if you have the DTS discs, a good reader, DTS will almost always run perfect. The only thing is that alot of movies aren't DTS encoded so you always have to revert to analog (unless you have a dobly digital reader on the same projector.)
Whoa kinda long, bottom line if they have good equipment and can run SDDS without a hitch go for the SDDS.