New Processors passing HD Sound?

I'm not sure I follow what you're hearing from these engineer-types. The 6-channel discrete out should be just as lossless as the HDMI, with the only difference being that it's being done at the player instead of the processor (after being transcoded to LPCM I'd assume?).

What are they saying the significant difference is?

My guess is that they were talking about the Toslink / Coax out, not the 6 channel discrete output.

6 channel discrete output will pass the lossless audio encoded on some Blu-ray and HD-DVD discs; because of bandwidth issues, Toslink and Coax can only handle lossy Dolby Digital / DTS.

Bluray/HD-DVD , does one or more of these new HD audios get associated with a particular video type or are they universal ?

Both support Dolby TrueHD and DTS-HD lossless. They each have different requirements on how the players handle them though - correct me if I'm wrong, but I think Blu-Ray titles are required to have Dolby Digital soundtracks, whereas HD-DVD players are required to transcode supported codecs to Dolby Digital if necessary.

That's all off the top of my head, though - I could be getting the details wrong.

How many of the newer DVD's out today are produced in one of these new formats , both video and audio ? Does one of each type seem to be dominant ?

The vast minority. Most Blu-Ray and HD-DVDs only have a standard Dolby Digital or Dolby Digital Plus soundtrack. I'd ballpark that less than 10% of titles support lossless. Even fewer support 7.1.