Just bought a 42 inch 1080p LG LCD TV.

I have the following setup

xbox 360 elite
HDMI to LG television
optical out from tv to denon receiver
HD DVD add-on

It passes Dolby Digital fine. DTS does not work.

If I hook up the xbox via component video with the optical cable going directly to receiver (bypassing the television), DTS works fine. Of course, this eliminates 1080P and I can't seem to hook up the optical and the HDMI together on the xbox because of the placement of the HDMI port.

Is there a solution other than don't use DTS?

You need the dongle that allows you to run fiber optic audio directly from the 360 to the receiver. The audio out on your tv is only supposed to be used in conjunction with the OTA tuner in your tv.

Right, but with the elite, you can't use HDMI and the optical dongle at the same time.

You absolutely can use both at the same time - I am. Optical dongle/toslink from my Elite to my Harman Kardon AVR and hdmi out from my Elite to my Pioneer 940 elite plasma. Works perfectly - surround sound when I want and tv speakers only for when my son's napping.

Right, but with the elite, you can't use HDMI and the optical dongle at the same time.

The optical dongle is a seperate item, not the component cable with optical output.

^
|

What he said. :)

Does it come with the elite, I don't remember seeing it?

http://www.xbox.com/en-US/games/viewer.aspx?productId=1791&assetTypeId=1&shotId=1

Item between the hdmi cable and the av cable is the "optical dongle".

Does it come with the elite, I don't remember seeing it? Yes, it does. It has 2 rca connectors and an optical port only. Was your xbox an "open box" item?

Thanks! I just overlooked it when I unpacked it. I assumed the pass-thru would work and didn't pay attention to the rest of the box. Now everything works perfectly fine.