I'm hoping Larry Osterman or someone else closely involved with audio in Vista can chime in here... but SPDIF in Vista still confuses me to no end.

If you don't know what SPDIF is, see here. In my case, I use to get an AC3 or DTS signal to an external decoder, providing better sound than letting the software or soundcard do the decoding and using an analog speaker connection.

In XP, this is really simple. There is only one "entry" for each audio device (I have two, an onboard Realtek AC'97 and a Creative Sound Blaster X-Fi), and it takes care of everything: analog sound, PCM digital out, and SPDIF passthrough digital out. In an app such as PowerDVD, I simply select "SPDIF" as the output option and it uses my external decoder no problem.

On Vista, I get two audio devices (or "end-points" I suppose). One is called "Speakers", the other is "Spdif-output" (for the X-Fi) or "Digital output" (for the Realtek). The Speakers one is the default audio device by default.

When I open the properties of the "Spdif-output" device, I can select the supported formats and sample rates, and this works fine. If I choose to test Dolby Digital, I hear sound and my decoder says its receiving a Dolby Digital signal. Note that the "Digital output" device for the realtek has the configuration option grayed out, has barely any properties, and cannot be tested. I can't make the PC make any sound at all with that device.

So far, regardless of whether I set "Speakers" or the specific "SPDIF" option as the default, no app can successfully use SPDIF. Applications like PowerDVD and Media Player Classic simply produce no sound at all when SPDIF is selected. In Windows Media Player I can't explicitly choose to use SPDIF, but if the "Spdif-output" device is the default WMP produces no sound with DVDs.

Windows Media Center comes closest. It can be set up to use digital output in the setup screen (which changes the system default audio device to "Spdif-output") and it does indeed give sound, using the external decoder. So that sounds good, right? Unfortunately, after about a minute of playback, the sound either gets very choppy or goes away completely (with the decoder showing "No digital data").

So what's the deal here? Am I supposed to set "Spdif-output" as the default if I want to use SPDIF? Why can't WMP use SPDIF? What're third-party apps such as PowerDVD supposed to do to use SPDIF since obviously the old way with a DirectSound stream doesn't work anymore?

If only this would work, then I could watch DVDs in Vista and I wouldn't need XP at all anymore. Having to reboot everytime I want to watch a DVD is driving me nuts. Sad