Exactly, your average "Joe Sixpack" seems to be perfectly happy with 128k AAC or MP3 stereo audio. People are lapping up the ipod.

Until there is some bona fide standards and interoperability, I suspect the HD game (if it ever really takes off at the consumer level) is going to be relegated to rather expensive higher end manufacturers catering to people with a lot of discretionary spending power. It's only when the mass production manufacturers start seeing real market opportunity that any affordable gear will be available. Until that time, your reliance on the analog inputs seems to be the safest haven.

The thing that drives me really crazy is that all of this copy protection crap doesn't inconvenience pirates in the slightest, but creates headaches for consumers who legitimately buy the content. When I was in Beijing a few weeks ago, you could buy currently running theater titles (including movies that had only opened in the week or two prior in the US) on the street for 10-20RMB, or about $1.25-$2.50. That included rather professional packaging. I doubt that will change anytime soon. And that was within blocks of Tiananmen Square and many of the government's official buildings. That's like being able to buy pirated movies across the street from the White House.