Just visited HDCD website. It's an extra 4 bits of resolution. Will make all digital recordings sound better even if you don't have the hdcd chip. Even better with the chip. Evidently most recording studios use this technology for all the stuff they mix - even stuff not designated hdcd and it's supposed to improve the sound. I doubt one could hear it on regular equipment.
The Rotel has the chip...therefore all digital recordings should sound better. It's used even though the light isn't on. On an hdcd cd the light should light up.
BTW - the best recordings I ever heard are from Professor Johnson's recording lab. He uses all tube 2 channel equip and the sound is beautiful even on not so great equipment. This was a few years ago so I don't know where they are available but if you can get your hands on one check it out.