Thanks for confirming that. Kind of a bummer, as it would not have been a huge deal to implement, and would have been great for HTPC users.

As far as decoding AAC, that is actually independent of the USB audio device. The PC still handles the decoding and sends raw PCM over USB to the codec, as if it were any other sound card. It should work just fine with WAV, FLAC, AAC, MP3, WMA, etc.