It decodes the DD 6.1 and DTS 6.1 matrix formats. A simple button on the remote turns on the 6.1 Matrix Decoding. DTS has released DTS Discrete 6.1 which is not a matrix format. The sixth channel is discrete, but the RX-V1 can't decode it. It is not clear yet whether or not discrete 6.1 DVDs will have matrix versions of the sixth channel on the disc for matrix-only receivers.
New formats seem to be never-ending.
It provides the means to make seamless wraparounds, and more directional rear effect. Because the rear left and right channels are actually designed to be on the rear sides rather than behind you on the rear wall, there was a need for a center rear to pull the effect more towards the back of the room. This also allows the effect to transition in a circular fashion around the listener, where as just the two original surrounds often created an over the head wrap effect. The decoding of the sixth channel in the Dolby realm is the same process as the center channel of the older Dolby Pro Logic. In fact, you can use your old Pro Logic receiver to decode the new center channel, if you don't have the RX-V1.