I recently changed my XBMC server to use an HDMI cable rather than a VGA to Composite connection. Unfortunately I had many issues getting it to pass sound.
I updated my Ubuntu from 10.04 to 11.10 hoping that would help and it didn't immediately. I ended up having to build XBMC from source along with installing other crud. Also ended up losing some source code :(
VERY long story short... I ended up changing my XBMC setup to disable DTS and AC3.
