[toddhutch]

Well my music library lives on a Solaris box (a ZFS server) and logitech media server doesn't work on that OS. So that's why I don't use squeezebox.
Besides, I've been using XBMC as a headless music streamer for years, albeit running on a PC. It reads the music files over the network via SMB, no special server software needed. It works fine headless as long as you've got a smartphone or tablet to control it from.

I'm not sure if this will work for you if you have the same issue I do.
I am unable to get optical audio out to work if I do not have an HDMI
display connected. You can refer to my previous post on how I am
not able to get optical audio out to work with a DVI monitor (using an
HDMI to DVI adapter), but I also figured out that it would fail with no
display connected. So, in short, no HDMI display connected, no audio
out through optical.

Actually I've been able to get optical audio out without an HDMI display connected. It seems that connecting to the HDMI switch in my AV receiver (with no display device attached) is enough to satisfy the FTV. The AV receiver needs to be powered on for this to work, however.
I've ordered a cheap (less than $10) standalone HDMI switch to see if that will also work. A passive switch won't work, but an active switch MIGHT work. An HDMI repeater might also work. I expect to have the switch tomorrow, I'll report back when I've tried it.

If your $10 option works, please report back, as I am not sure which of the many options to try. I'd like the first one I buy to work. ?