"The USB receiver accepts uncompressed PCM audio only and does not have pass-thru support for compressed formats like DD/DTS."

Waaaaaaah! Me not happy about that (snif).

I suppose it means that I'll have to use the SPDIF output on the networked thin client I'm building for the media room (nano-ITX Via Eden N 1.0 GHz, CN400 HD MPEG2/MPET4 decoder, VT1625 HD RGB to YPbPr TV encoder, DVD/RW drive, hard drive, ethernet, USB 2.0, all in a Silverstone Lascala LC-08 case*, running MythTV, fanless).

*N.B. Via changed the backpanel nano-ITX layout and PSU connector at the last minute, so current LC-08 (and LC-07) cases will not accomodate the board. Silverstone is supposedly changing the LC-08 and LC-07 cases, but I haven't heard when the new ones will be available.

Cliff - Not to flog a dead horse here, but are you saying even if you could send a bit perfect DD or DTS stream out the USB that the Pre/Pro can't handle it? I'm only interested in bit perfect PCM but I would have thought the Pre/Pro would be smart enough to recognize the DD or DTS stream.

That is what I'm saying. The USB receiver chip "assumes" the stream to be PCM audio and sends it to the DAC and does not have the support to check for DD/DTS flags that would be required to route the compressed stream to the DD/DTS decoder before sending to the DAC.

If you send a compressed stream to the USB port it will generate noise. EDIT: Or maybe not! I checked several software DVD players on my computer selecting both DD and DTS tracks and they all decoded the audio streams in software sending stereo PCM over the USB bus.

Thanks Cliff I didn't know about the PCM only on the receiver chip.

Just a note, you can buy a Chaintech AV-710 card for around $30 on ebay or from an online computer reseller. This card uses the Envy HT24-S chipset and is well documented on the internet (for example on the head-fi forum) as supporting bit perfect output over a digital out connection.
This will allow both bit-perfect 16 bit 44.1 PCM output (via either ASIO or and passthrough DD and DTS.
The VIA Envy drivers are well developed and documented.
I understand what you are trying to do with the receiver but for $30 it is well worth getting the sound card, even if it is a second sound card (I still use an Audigy for gaming)