I am trying to find a way to have my PC work optimally with a surround sound system. I'd like to be able to multi-channel data over digital coax to a receiver so I can make use of the multitude of decoding formats that the receiver supports, but I realize there are some limitations. I understand that the s/pdif format only supports 5.1 audio through AC3 or DTS formats, so games will not be outputted in surround. Using AC3 filter as an on-the-fly encoder would change this, but this would degrade the sound quality as it is a lossy format, though I do not know how noticeable it will be.
I am dubious of the quality of the DACs in PC sound cards, so I would prefer using digital outputs from the computer and leave the conversion to analog to another device. Is this is a legitimate concern or are the differences among DACs indistinguishable?
Also, according to this:
http://ac3filter.net/guides/ac3filter_spdif
S/PDIF requires that only 1 application is playing audio at a time; this is simply not acceptable for a PC.
I am looking for a USB or Firewire audio interface that will allow me to decode common encoding formats and use a 5.1/5.2 system. I am using Vista x64.