Source - Dolby Labs
5.1 Setup
This system has six channels: five full-range channels, and a low-frequency effects channel (the .1 of 5.1) usually expressed through a subwoofer. Many DVDs and digital broadcasts feature a Dolby® Digital (5.1) soundtrack, so this will give you optimum sound for most programming. It also most closely approximates the sound in most cinemas.

I will make the assumption that you have a surround sound or home theater receiver and start from there. There are 3 main home theater speaker setups which you will see termed 5.1, 6.1, and 7.1 channel surround. You will also see mentioned the terms Dolby Digital, DTS, and Dolby Pro Logic. Let's dispense with the latter first: if your receiver is only Pro Logic (only older receivers at this point) you do not need to worry about 6.1 or 7.1 surround. There are some other formats such as Dolby Digital EX, Dolby Pro-logic IIx, Dolby TrueHD, DTS neo:6.1, DTS-ES, True-Surround XT, and undoubtedly more.
The two factors to consider are:
1. how many channels does your system permit, and
2. Do you want to buy that many speakers?

Selecting and buying the right LCD TV for you depends on several factors price and size being the two most important. LCD televisions can be tricky to figure out, but once you get used to some of the terminology as you shop you?ll become more familiar with the different brands and size ranges. Choosing a size for your home first and foremost has to do with space; how much space do you have available and how big a screen do you want.....

The optimum TV screen size is directly related to the available viewing distance – but there are other factors as well that need to be taken into consideration.Sit too close to your big screen TV and you will be able to see the image build-up structure

When you buy a DVD for a Home theretre system it will be always confusing which sound format to select. In some cases movie makers release both versions together. But again you will be confused which sound format to be selected to get perfect sound effect to enjoy maximum out of your investment. Here is a comparison study by expert Andrew Ghigo.

Dolby Digital and DTS Digital Surround - Identifying the main differences between these multichannel sound formats

Many audiophiles and home theater enthusiasts argue that DTS surround sound formats can deliver higher quality audio in comparison to their corresponding Dolby formats, with improved dynamic range, better representation of subtle detail in audio content, and improved signal-to-noise ratio.

Partly, this reasoning arises because DTS surround sound is usually encoded at a higher data rate than Dolby Digital and its lineup of associated formats.

This is more than understandable. We are dealing with lossy compression techniques. A higher bit-rate for the same format should normally implies superior sound during playback, as less compression in the encoding process should..