Okay so regarding Dolby pro logic/matrixed surround, I've been asked about this a few times because I always release my edits in this format and have talked about it, and it seems to have come up again, so I'll try to add a little clarity, although what has been said so far has been more or less accurate but maybe I can clarify how it works and why it works that way a little bit.
Before I do I'll just say that it's not that I think it sounds better or is a "better" format, it's just that I think it's a really convenient and viable option for fanedits for several different reasons which I will talk about below. It does sound very good though when done properly.
So yes, it is a surround mix encoded into a 2 channel track, and this is accomplished by both a specific phase filter and also a sortof general algorithm. Specific surround effects, like sound effects and other sound meant to be in the rear channels, will have a specific phase applied to them that the surround receiver when in pro logic mode will pick up on and send to the rear channels. It's a very slight phase and is barely even perceptible to your ears but the receiver hears it and it actually works very well. Then there is also an algorithm that automatically detects dialogue and filters it as best it can to the center channel. There is a bit of bleeding to the left and right front channels so you wouldn't be able to use this as a method of isolating the vocals for editing purposes, but for viewing it sounds just fine. There won't be any bleed to the rear channels or anything.
This algorithm will also automatically upmix the music or score as well as Ambiant and scene noise and send some of it to the rear channels as well so the sound mix will sound immersive in surround all the way through the same as a discrete mix would. And yes, this also means to a degree you can upmix a regular stereo track that isn't matrixed and get surround appropriate dialogue and music, but the sound effects will mostly all be in the front channels. The subwoofer channel is automatically created using a low pass filter as well.
Also worth noting is that this is all encoded into the audio itself, it's not metadata in the container or anything like that so it's not married to being a Dolby ac3 file, you can use pcm or dts or whatever if you want. As to whether or not any filters you apply will interfere, it's not likely unless it's a phase filter.
This practice was used for home video releases for like VHS and other instances where it was limited to two channels. It used to be called Dolby Surround. Many of your VHS tapes will actually have this surround on them, it's just kindof taken for granted because surround in the home wasn't as common back then and thus less talked about, but it was there. Pro logic 2 is just an updated version of that with a more accurate algorithm for filtering the audio and also made it actually 5.1 surround with stereo surround channels (the first Dolby surround mixes had more or less dual mono for the surround channels). They are however cross compatible, your pro logic receiver will still work with them. The rear channels sound effects will be dual mono but the music and ambiance will be stereo like normal and the front will be normal. This was also used in some video games before game systems started using HDMI. Even ocarina of time for Nintendo 64 used it and it actually sounds fantastic in surround. And for the wii era, if you'll notice there's a surround setting in the system menu despite it only offering a 2 channel hookup. It's doing this if you select the surround setting.
This actually works very well, and will give a surround experience that is, let's say about 85% as good as a discrete mix. But there are many reasons it can be a viable option for releasing fanedits or other personal videos.
So why would you use it? There's a few reasons why I think it's a decent option for fanedits (although to be clear I'm not saying it's the only good choice or anything). One obvious one is file size. You can now get a really good sounding surround experience but with the file size of a stereo file, which for authoring bd25s means more bitrate can go to the video, or just to make it easier to have an economical file size for streaming but without sacrificing the surround experience. Also it will still sound great in stereo, like I mentioned earlier most stereo mixes used on VHS and such were actually using this.
Another reason is simplicity, if like Ray you prefer to edit in stereo for ease of use or for whatever reason you can do this to edit in stereo without sacrificing a surround experience for any users that may want it. Also if your edit is combining multiple sources and some of them are in stereo this can make them blend easier. I personally edit in surround most of the time and then downmix it in post got the convenient distribution format mentioned above and for another reason I'll elaborate on below, although in a way the following is also still part of the convenience and simplicity appeal.
There's also the manner of it being easier to add your own elements if you want to add music or something, doing it this way will cause the algorithm to basically do the blending work for you so it fits in the same in the surround mix as all the original score. Or if you have to make an edit to the surround channels specifically, it can make it easier to cover whatever you did in the surround and blend it. Due to the nature of the way it filters music and ambiance to the rear channels it will sortof automatically smooth over any seams there may be in the edits to the rear channels. (Obviously this does not apply to any transitions or like, "cuts" per see, I'm just saying if for whatever reason you have to mute something but only in the surround or in the center channels, it's much easier to cover your tracks so to speak. Like if you have to just mute something in a specific channel you can just fade it out and then back in and you won't have to manually add ambiance into those channels to cover it because as long as the overall volume stays consistent it won't be audible in stereo and when upmixed to surround the algorithm will automatically cover it)
As to
@Hal9000's question as to whether you have to start with discrete channels to do this, the short answer is basically yes. However, if your 2.0 source is just an older but official sound mix of a movie then it very likely already is matrixed.
Hope this helps. I know that was long winded but I wanted to cover everything. Again I'm not saying it's inherently a better choice, I'm just saying for some edits, some editors, and some situations it can be a viable option. I'm one of those. If you want to try it, you can do the downmix in avisynth and as said it will still sound normal in stereo and doesn't need any special format or encoder settings, it's directly in the audio. I recommend adding a very small amount of DRC to it (don't do that in avidemux though because it's way too aggressive even in the lightest setting, do it with something else because you only want a little bit. A little bit can make the dialogue more clear and give the sound effects a little pop)
