>Other options that exist include Blu-ray<
If Blue-ray, will the format will be one of the surround modes such as TrueHD or does Blu-ray have a special format for Stereo Audio?
>Licensing is a problem for stereo digital output of SACD over optical and coaxial.<
Why is licensing not an issue with HDMI. My guess is venders are able to insert copy protection into the stream?

>Put simply, optical and coaxial won't handle more than two channels of lossless audio.<
Very informative.

>or a lossy Dolby Digital<
Is Dolby Digital always lossy? I thought DD was the default format even for BD?

>That can work for any formats (SACD's DSD, DVD-Audio's MLP, Dolby TrueHD, DTS-HD Master Audio, or raw multichannel PCM)<
Are all multichannel formats passed via LPCM when using HDMI?

Thanks Bob