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1. BYPASS works only for 2 channel, not 5/7 channel
Selecting DOLBY on remote selects Dolby EX on some occasions and you have to go to root menu to change to DOLBY or PLIIx
The remote uses IR so the only explanation is that the position of the TV screen causes interference to the remote. This is very unusual indeed. Try to experiment with a different position for the equipment(s) or point the remote at the AVP-17 from a different angle. This might give you some clue about the nature of the interference.