Hey, thanks Bob!
I turned the 1070 off for a while and then turned it back on. Funny, it's the #1 step I do if something's flaky with my PC but I just never though to power-cycle the 1070. D-oh! I've now had no problems for the past few days.
I noticed it also had this advice in the manual:
In rare cases the Model 1070’s internal processor may freeze or lock-up causing
abnormal operation. This is common to all microprocessor-controlled devices when
the unit is subject to excessive static discharge, AC line noise, or power spikes.
In most cases it is easy to solve this problem by simply unplugging the
Model 1070 from its AC power source for about five minutes. After waiting,
reconnect the power cord and turn the unit on. If the unit functions normally,
no further action is needed.
So everything works fine, switching between 5.1 and 2.0 satellite sources or switching the computer sound card feed from DD5.1 to DTS5.1 to PCM 96KHz is all seamless.
I'm currently using the 1070 remote, but I'll keep your advice #3 in mind if I start using a universal remote.
Thanks again!
-John