From Dell support:
From your e-mail I understand that as you use the PowerDVD software, you only get pro-logic output but not 5.1 Dolby Digital or DTS. I sincerely apologize for all the inconvenience caused to you, however please be assured, I will personally look into the matter and resolve it to the best of your satisfaction.
Marc, I would like to update that the Dell supplied OEM version of the PowerDVD software only provides a 2 channel analog output. It will also use S/PDIF (digital) output IF the disk supports it (has a DD or DTS digital audio track). S/PDIF is not full uncompressed HD Audio. Further, in order to get Full Uncompressed HD Audio, you'll need the full version of PowerDVD - you won't be using S/PDIF (which doesn't have the throughput required for HD Audio) - you will be using 5.1 or 7.1 analog audio - and you will need a sound card or codec capable of outputting uncompressed multi-channel analog HD audio.
I would also like to update that in case you need support regarding the S/PDIF, in order to resolve the issue at the earliest, we need to check the software settings and for the complete resolution to this issue we need to perform advance Software troubleshooting and for the same we have a Department at Dell called Dell Solution Station which is a paid support.
My setup is Zino USB -> SPDIF AVR and I understand the limitations to stereo PCM or DolbyDigital 5.1 or DTS 5.1. I'm under the impression that Blu-ray are required to include DolbyDigital 5.1 and/or DTS 5.1 tracks. I get pro-logic for all of my Blu-ray disks *and* all of my DVDs that I know for fact provide DolbyDigital 5.1 and/or DTS 5.1 tracks.
I do realize that the SPDIF hardware is 3rd party and y'all are not responsible for it. However, you sold me the PowerDVD DX software which is supposed to support this feature. I'm not too keen on paying you guys more money to get this working. I just gave y'all $560 for this machine and that's quite enough for now.