I have PowerDVD trial, an sblive with the daughter card and some midiland 8200s. I can't get doblydigital to work. I choose 5.1 as my speaker output in creative's speaker options, i dunno what i'm supposed to do.
What OS do you have? If you have Win2K, forget it...AC-3 passthrough currently is not working with the SBLive in Win2K. Otherwise, I'd say make sure you have the correct S/PDIF passthrough settings in PowerDVD.
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