It is, in fact, a DirecTivo thing. Since it records the satellite bitstream directly to the hard drive, it will also play the digital audio bitstream over the optical digital output, whether it be PCM or DD.

On a separate note, the friend that helped me compare things has expressed a concern that there might be something wrong (vs. in need of calibration) with the LFE out on my receiver. When playing back music in two channel mode (no sub), the bass was there, and sounded good. It was in modes where the sub was used the things started to sound thin.

--Mike