Originally Posted by RaggedEdge
Of course it played HD audio, but did it DECODE HD Audio? That is the rub, nobody is saying that the Dune's won't bitstream lossless audio, we are trying to figure out why the newer firmwares won't decode HD Audio.
On the Dune site, in the firmware section it says this about the Smart B1/D1/H1 110511_2007_beta:
* Added new audio output configuration possibilites.
- The setting "Setup / Audio / Audio decoding mode" allows to specify
the number of channels (stereo, 5.1, 7.1), which should be output to
analog audio outputs and HDMI output.
- NOTE: This setting influences only audio codecs for which
multichannel audio decoding is allowed according to license
restrictions, such as PCM or FLAC. License-restricted audio codecs
such as DTS and Dolby can only be decoded in stereo mode.
For some reason this didn't make it into official firmware until 110606_1315_update1. So 110606_1315 still decodes licensed HD Audio (TrueHD and MA).
At some point - late last year, or early this year - the website description for the Smart line changed to PCM decode to stereo for Dolby TrueHD and DTS-MA.1. This only appears to affect the Smart line, not the Max2. This only affects PCM decoding, not bitstreaming3. This only applies to Dolby TrueHD and DTS-MA.
I think obie_fl had the most plausible explanation - Dune launched the Smart line assuming they had licenses to DECODE, then found out they didn't. (As someone mentioned earlier, there are TWO licenses available - one to PASS-THROUGH, and one to DECODE.)
Rather than retroactively purchasing licenses and making all of us Smart owners whole, they chose to disable functionality in firmware and revise the description on the website (so no one could claim it didn't work as sold).
It's always easier to CYA than do the right thing.