I have a new 1070. I have both my HD cable box and my Oppo DV-981HD connected via Optical cables only. On the Oppo I have the sound output set to Raw.

On the 1070 I have Stereo as an option, but I do not have Bypass (when I press the Bypass button, nothing happens). Is this right? The manual doesn't mention anything about when Bypass is an option and when it is not.

Thanx!!

The 1070 is behaving properly. "Bypass" refers to an analog bypass - in bypass mode, stereo analog inputs are sent through the 1070 without being converted to digital for processing. With a source that is configured to use a digital input, there's no analog signal there to bypass and so it's not offered.

gong is right. I'd correct him only by saying that it's not only for stereo, but for all 8 ( 7 + 1) channels ANALOG coming from your Oppo.
I honestly feel that this feature should have existed for CD input as well, not only for DVD.
Outlaw has it on all analog sources for their sound processor, not for the 1070...

The "bypass" option selected with the remote relates to any stereo analog input, allowing the receiver to keep inputs in the analog domain all the way through. The 7.1 Direct input on the 1070 has a separate control on the rear panel that determines what happens to that analog signal (analog bypass, analog bypass with 80Hz analog bass management, or digital bass management that converts the input to digital and back to analog).