CMSS is a feature which 'up-mixes' stereo sources so that they seem like 5.1 audio. 'up-mixing' is a feature found on most decent home entertainment systems. im not quite an expert, but i believe it shifts sounds with certain frequency ranges to the unused speakers(back and center). so, in other words, with stereo sounds like music and movies that only go to 2 channels, turn it on for a little more immersive sound. with games and dvds and such its worthless, since they already go to all channels. if you dont really care and/or your speaker setup sucks, just leave it off.
and your other question, AC3 is another word for dolby surround or multi-channel audio. so yes, its perferable to just plain ol stereo, as long as you got a 5.1 setup.
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