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[zaphod552]

The Xbox has the capability to realtime encode DD 5.1. For example a 2 channel MP3 played in XBMC will be encoded by the southbridge into Dolby Digital 5.1 in realtime . This is at a bit rate of 384/448kbs. DTS is around 768kb/s. There would not be nearly enough bandwidth to realtime encode DTS just yet...maybe xbox360 will be able but doubt the DTS guys would be interested.
    I really hope Xbox360 supports realtime DD5.1 like the xbox. This is one hell of a feature if you have a DD5.1 capable reciever.