Maybe this requires an explanation of what Surround sound is.
I'll find ya'll a link in a minute here but heres a summary. Surround sound isnt a matter of levels on certain speakers. It is infact software which is hardwired into receivers. Hence the reason you have different modes with different receivers. It decodes the digital source feed and places it according to the software. So James you are correct. A film, filmed in Dolby Digital 7.1-9.1 (they never film in 5.1) would sound best in those appropriate settings.
When you change modes to a stereo output. Either your 7 channel, 2 channel, what have you, you negate the software installed for surround sound decoding and place the load on all the speakers. There is no decoding done by the receiver, it is purely spitting out the level.
Does this make sense? Like I said I will try to find a clearer explanation.