Just how obsolete are DD and DTS?

What is someone missing if that person decides to buy a heavily discounted DD/DTS pre/processor? Can THX movies be played successfully on a DD/DTS decoder?
The answer, quite simply, is yes. THX certification means nothing more than it having been MIXED properly to meet specs. Substantially less important on the video side of life than the audio. Even the audio side is given FAR too much credit for THX certification. There are many amplifiers, where not THX certified, are FAR better than the THX specs.

Now, what you will miss with a processor/decoder/receiver that is not THX certified, and you play a DD/DTS signal is the THX reequalization. What this does is 'even the playing field' and take the very highs out from the DD/DTS signals and increases the voice signals. THX was designed to help ProLogic recordings and not necessarily DD/DTS.
There are newer formats that will help, but it basically makes the sound less harsh.

At normal listening levels you will not hear any differences.

So, get a DD/DTS processor and don't worry about it. If you do not like the 'harshness' of some DD recording, buy a processor that has THX circuitry or a Yamaha (others I am sure) that does Cinema RE-EQ, same thing. For video, it means nothing. All DVD players and LD players will play a THX piece of software just the same.

THX was basically junk to start off with and that is why the other formats arose. It was easy to improve upon a flawed medium. As such, i would not worry too much about THX and look for the best DD / DTS processor that you can snag for the money. After all, most of these processors DO have tone controls if you find something slightly "edgy" sounding. Sean
If you have a DTS setup I think you will be fine for a long time. I have a B&K ref30 with 7 speaker outputs. Big deal where the hell am I going to put all the speakers? 5 channel suround is just fine for me. Last year everybody was freaking out about DTS ES. I think there was 2 movies out in that format at the time. Such a big deal is made about SACD and DVD-A,when the movie soundtrack formats are the biggest joke. You would need to buy a new pre/pro every six months to keep up with it.
Well guys, you've seen my posts here: I started with a simple 2 channet HT, then a friend gave me a set of used Bose 901 IVs that need refoaming...

About three weeks ago I watched Spiderman in a concave screen movie theatre and they were using Sony digital movie format, if I recall. The way the sound was setup is not feasible for HT. A few days later I went to The Gramophone in Detroit and auditioned a *spectacular* HT setup while watching Pearl Harbor. The surrounds looked like inverted 901's!!!! That's when my mind started running. I CAN build something decent for a reasonable amount. So the DD/DTS pre-proc will do the job...

A point of clarification needs to be made about THX. THX is not, and never has been, a recording format in the sense that DD and DTS are. Tomlinson Holman is the audio engineer who, in cooperation with George Lucas, developed the performance specifications that came to be known as THX (an abbreviation for 'Tomlinson Holman's Xperiment'). Holman was also known for developing the well-regarded Apt/Holman preamp in the 1970's.

At the time Tom Holman developed the THX standards, the quality of sound in many theaters across the country was mediocre to abysmal. Holman and George Lucas wanted to ensure that the sound quality of the original "Star Wars" movie contributed to the overall impact of the film. The THX specs that were subsequently developed were to ensure that theater sound systems met the performance parameters needed for high quality theater audio. (The THX standards specified factors such as the number and type of speakers; the amount of amplifier power needed to drive the speakers, and the way the amplifiers responded under peak load; the kind of theater furnishings; etc.)

There are many audiophiles and home theater experts who believe that THX spec's are largely irrelevant for the home environment. THX has made a bundle of licensing money from manufacturers that want to have the THX logo on their equipment, because uninformed consumers are willing to pay more because they incorrectly think that THX is necessary for the home theater environment. In most cases, it is largely meaningless. (For example, there is a THX version of the Bryston 4B-ST power amp that is identical in every respect to the "standard" 4B-ST, except for having a 12 volt switch that turns the amp on automatically when the preamp is turned on. This auto turn-on feature is a THX spec, which even the totally uninformed consumer ought to realize has NOTHING to do with sound quality.)

Many surround processors have a THX equalization circuit that can be engaged or disengaged. The purpose of the THX post-processing circuit is to slightly roll off the high frequency boost that is often added to movie films to compensate for the loss of the highs in a large theater. These high frequencies can lend a somewhat shrill quality to movies seen in the home, so THX post-processing provides a way to correct for this.

As others have already commented, DD and DTS are likely to be around for quite some time. The general consensus among critical listeners is that DTS provides better audio quality than DD, because it has a higher data rate than DD. DD, however, has the lion's share of the market. DD and DTS have essentially killed off SDDS, Sony's movie sound track processing that required its own proprietary soundtrack playback system in the theater.