This thread is a couple of months old i know, but...
I think people are being confused with the pro logic, and pro logic 2... Pro logic is the old analog way of stuffing 4 tracks into 2.
Dolby Pro Logic
http://en.wikipedia.org/wiki/Dolby_Pro_Logic
"Dolby Surround/Pro Logic is based on basic Matrix technology. When a Dolby Surround soundtrack is created, four channels of sound are matrix-encoded into an ordinary stereo (two channel) sound track by using phase shift techniques. A Pro Logic decoder/processor "unfolds" the sound into the original 4.0 surround—left and right, center, and a single limited frequency-range mono rear channel—while systems lacking the decoder playback the audio as standard Stereo."
I think the original question was can KX do matrix encoding for people with a 2 channel analog pro logic system?