[RipT]

I've found the settings for passthrough a bit convoluted with HDMI output. It looks like you don't have pulseaudio from your log, so make sure you have chosen HDMI for your audio output. Then you have a choice. If you select 5.1 channels (or 7.1 if your AVR can handle it) you need to leave passthrough disabled. You should then have all of your sources converted to LPCM and sent to your receiver (assuming your receiver can handle LPCM, they usually do) You will get surround sound from everything but it is converted first by XBMC. If you want passthrough, then set your number of channels to 2.0, enable passthrough (in that order) and you should see an option for transcoding to AC3 under the passthrough options. Enable that and you should get AAC to transcode to AC3 and all your movies with AC3 and DTS to work too. Make sure your passthrough device is also HDMI and that you have enabled AC3 and DTS. Note that , for me at least, the AC3 transcoding option disappears if you anything other than 2.0 channels set.

If you do have pulseaudio on your system, then you also need to set the pulseaudio output device to stereo HDMI to get passthrough to work. I don't know how to do that on Arch, but on xubuntu there is a gui called pavucontrol. To get the multichannel LPCM to work with pulseaudio you need to set the pulse output device to 5.1 channel HDMI, and the number of channels to 5.1 in XBMC. You also need to select the pulse audio virtual device in XBMC.

One caveat is that you seem to have a lot of errors on ALSA at the start of your log. fritsch or wsnipex can tell you better than I whether there is some problem that needs to be corrected there.