Joe... the problem occurs when I use my GT430 HDMI or the on-board (ATI) HDMI. I have not tried setting the sound to 2.1 though. The issue does not occur when watching streams, blu-rays, dvds, etc. So, if it was a 2.1 issue, I could just use 2.1 for normal TV watching, then flip over to 5.1/7.1 for movies? Great tip! I'll test it out today.
EDIT: Forgot one detail... when I do experience the audio/video drop out... if I minimize the media center window on the screen (to a size smaller than full screen), the issue goes away. To put it another way, the issue only happens on certain channels when media center is in full screen mode.