Ok so you got the picture, but no sound to the receiver? But when you connect your HTPC directly to your TV, you got sound? I'm not sure what's wrong in that case. What does the 818 says it's getting? E.g. using the display button multiple times, you'll see first the input source and listening mode, then the audio input format, and then the input and output video resolutions.
Well you can select "analog" in XBMC's sound settings and it will work more easily. That setting is not very well named as you won't be getting analog sound at all. It just passes the stream to Window's sound server, which then handles everything. When using this, then make sure that the corresponding windows output device (i.e. HDMI) is correctly configured (e.g. for 5.1 audio -- you can test this with a button in the configuration wizard). Your receiver will then get multichannel PCM and will display MULTICH by default.
You can also use XBMC in passthrough mode, where it will bitstream compatible content to the receiver. To do this, the HDMI device in Windows must be set so it can be controlled by any software. Then, in XBMC's sound setting, you have to select HDMI output and select the formats that the receiver can decode (I think the 818 can decode all of them). Now in the passthrough output device on the bottom of the settings page, you have to select Window's WASAPI output for the correct HDMI output. If all is set correctly, a DTS HD Master Audio track for example will be bit-streamed to the receiver directly, with no system sound mixed in it.
One complication I have is that XBMC sees many HDMI outputs for my single nVidia card (rencent nVidia cards have multiple virtual outputs), and the "correct" output is not always the same. I have not resolved this yet... In the mean time, I don't notice any degradation using "analog" output (i.e. letting the OS decode the stream and sending PCM to the receiver).
Neutro: The plot thickens: When I select "AMD HDMI output" from the sound devices menu in the control panel on the computer, I see the "Multich" logo on the Onkyo, and can indeed play and hear the test tones of that driver through my speakers. The same thing happens when I select the "Realtek Digital Output" Driver in the computer (i.e. the Onkyo can detect and play test tones through the speakers)... The same thing also happens when I select a USB driver I have installed for my Emotiva Stealth DC 1 DAC.
The disheartening thing, however, is that I can't get any regular audio device (itunes, internet sourced audio programming, xbmc, and any media player) to play normally through my speakers.
One possible explanation is that in the audio devices menu, another Driver from "Realtek HiDefinition Audio" that is identified as "Speakers" is greyed out, and marked "Not plugged in." If that is indeed the problem, I wonder how I might change that. If you have any tips as to how I might resolve this issue, let me know. And thanks for all your help.