If I go based on what Slipstreem suggested, that would a bitrate of around 384 - 576 kbps. Given Dolby is 448 kbps, I am now reconsidering if it is even worth transcoding.
QUOTE(kornchild2002 @ May 8 2008, 05:49)

Sorry about the long delay. I haven't had much experience with 5.1 files. I did some ABX experiments quite a bit of time ago and found out that 256kbps AAC was suitable for my needs. I was transcoding from an AC3 Dolby Digital lossy source as well. Slipstreems advice of multiplying the bitrate by 3 seems to be the standard. However, I did not like having videos with bitrates of about 384kbps given that the source audio was encoded at around 400kbps VBR. Since I was transcoding from a lossy source, I figured I could get away with using a smaller bitrate.
What will be your primary ways of playing these videos? Are you going to be using dedicated hardware such as a PS3 or will you be using a computer? If you are going to use a computer then I suggest looking into HE-AAC for 5.1 audio. From my experience, I could get away with using a lower bitrate while still retaining the quality. It limited playback of the files to my computer (in order to get the true quality of HE-AAC, I don't have any hardware aside from my cellphone that supports HE-AAC files), that is why I stopped using it and went back to LC-AAC for my movie encoding needs.
I wanted to make "video library" on my computer. My target was to use about 10 MB per min (about 1393 kbps). I already figured out how to incorporate chapters and subtitles (vobsub) in the final file (with matroska). I would be using H.264 for video. I had to choose between matroska and mp4. Matroska could fit all the different types without any glitches. The cost was I would never be able to play it in any hardware player. Atleast till there is support for matroska. MP4 doesnt support Dolby so thats another issue to consider. I was very strongly in favour of 256 LC-AAC (I chose LC because I heard the support for HE was minimal). If I choose Dolby, I have to go for matroska and if I choose AAC, I have option between matroska and MP4. I will test the chapters and subtitles with MP4 first. If that goes good, then I think I'll go for 256 kbps LC-AAC and MP4 for the sake of compatibility.