Originally Posted by Ruiner
I may be mistaken, but was under the impression it applied to analog out as well, except for HDAV 1.3/TMT and Auzentech 7.1/PowerDVD.
From the Protected Audio Path Wiki:
"These restrictions concern the various outputs from the PC. For DRM content, digital outputs such as Digital Visual Interface (DVI) and High Definition Multimedia Interface (HDMI) will have High-bandwidth Digital Content Protection (HDCP) enabled, to prevent someone from recording the digital stream."
It's a little complicated... but here's how it applies to your example...
Due to PAP, on your computer's HDMI/DVI output (video card OR onboard) is limited in the audio resolution it'll offer. This means, if you connect your HTPC to your reciever over HDMI, you'll downsampled audio.
There are only a few ways to remove this limitation.
Using the HDAV1.3 with TMT was one such way. You take the computer's HDMI output, connect it to the sound card's HDMI input, then the HDMI output goes to your receiver. In this way, the HDAV1.3 maintains the PAP, and full resolution audio is allowed with TMT.
The HDAV1.3 is packaged with TMT to make it a one-stop solution.