Heh, actually I don't know why the X-Fi's AC3 decoding sounds better than the reciever's AC3 decoding.
I don't know either. Some more anal blind testing types might point out a lack of level-matching, differences in the setup, measurements to show the output is different etc. I personally believe if something sounds better to you, go with it because trying to prove it with measurements does require a bit of a dedicated hobby that most people don't have the time or drive for.
I do know that I had to use a DVD to test it because Creative seems to write their drivers with the assumptions that DVD's are the only source of AC3 or DTS soundtracks.
Interesting. Perhaps you should try the Creative forums and ask the tech support, perhaps they could confirm your beliefs or help you reach a solution to your problem.
Again I am just assuming that with a $1000+ Receiver you are better off using external AC3 and DTS decoding. Maybe its so expensive because of the insane number of connections. Analog output might end up sounding just as good or even better.
Analog output might sound better for any number of reasons; could be objective (measurement's neglibly different in noise level, but for some reason volume is higher, and louder = better to the ears) or subjective (personal preference to a certain type of distortion).
However, analog output objectively cannot measure better if the volume is level-matched, because even if you have a better external DAC than the receiver's DAC, and the noise differential between ADC+DAC and DAC only processes is neglible, you still go through both the receivers DAC and the external DAC. So even with 0 conversion loss, the use external DAC logically couldn't result in a better real measureable output.
This isn't to challenge your assertions, these are simply what I've come to believe from what I've read about audio theory. So, there certainly could be holes (or additional problems) that somehow could lead to analog > digital.
The whole concept of digital isn't who has the better DAC, but to minimize the totally digital to analog processes. Your receiver could have the crappiest DAC in the whole chain, but using it alone instead of in conjunction with all the others should give you the least noise level. If you go analog, aka going with a seperate DAC other than a receiver's DAC, then you need a seperate amplifier as well.
From what I understand, alot of people use seperates for this reason: they wan't a better DAC than the receiver offers (audio purists with alot of money?), and so they use the pre-outs (effectively regulating the receiver to just a dolby digital/DTS decoder) and feed it directly to seperates amps from an external DAC, to avoid the whole receiver DAC-ADC process.
Really I am just annoyed that I cannot enable AC3/DTS digital passthrough from .avi sources with the X-FI.
I got SPDIF passthrough to work correctly with every other Creative Card supporting Digital Output.
Honestly, once I got it working I would just turn it off.
But I am still going to give it a try everytime Creative releases a new driver or if and when a new AC3 filter version is released.
The Russian who codes AC3 Filter answers most comptiblity problems with the offer that if you send him the hardware he will see if he can tweak his code to work with it. I guess no one has sent him an X-Fi yet.
Freelancers do need a bit of nudge to work on something, perhaps a donation