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like i said, i didnt really care since i dont have any devices with hdmi. and if i do end up getting a blu ray or ps3, ill just use the spdif audio. no biggie since its a "cheap system" anyway.
also, if ive lived with compress audio for 24 years and a crt tv with 2 purple magnetized corners for 4, i can deal with not having lossless audio. =)