There are loads and load of posts on various forums in regards to some ATI cards that have a DVI-HDMI adaptor and then the ATI CCC shows when connected to certain receivers as only DVI and you get no audio (even though you hooked up the cable from the audio card to the video card), or that they are simply not able to select 5.1 or 7.1 speaker out as a setting even though they have a 5.1 or 7.1 system.
Anyhow I went ahead and got a cheaper ATI 4550 with built in HDMI (for less than $70). You DO NOT need a 4870 1GB to do 10800p. Please read the write-up that Anand had a while back on the 4350 and 4550 as perfect HTPC cards under the Video section.
I installed it in my HTPC and then the ATI newest CCC drivers. You then need to go over to Realtek and dowload their newest ATI HDMI audio drivers. Once you install that and you are connected to a receiver through HDMI, you should be given the option to set your audio to stereo, 2.0, 5,1 or 7.1 based on obviously what speaker setup you have on your reciver.
The key is setting up the FFdshow and other codecs, what you use to play the movies etc and of course drivers. I output this to a 52" LCD. Everything works great. I even have one of the receivers that everyone said they had issues with (Onkyo) and I had no issues whatsoever.
The best you can do now is 8-channel LPCM over HDMI and hardware decoding for H.264/VC-1/MPEG-2 with this setup.