"I thought how the amp decodes the incoming stereo signal (DD 2.0, PCM, analogue) depends on the amp itself, my Yamaha A/V receiver can take a 2.0 signal (analogue or digital) and output it through Pro-Logic, Pro-Logic II or any number of the DSP effects."

You are correct, and as I said, my AMP *doesn't* have Pro-Logic II steering. It *does* have AC3 decoding.

"I've always felt uncomfortable about creating a "fake" 5.1 mix from a matrixed 2-channel source"

But it's simply the Pro-Logic II equivalent, stored in 5.1.