I have my DVD player setup as "multi-channel," but then I set up my front speakers as large, set rear speakers to none, center to none, and sub to none. I think I did this to get the sub channel to redirect to the mains. I should probably try setting it to 2-channel mode in case it makes a difference.
The multi-channel LED simply refers to the source. When it's playing DD 2.0 (my preference), it's off; when it's playing DD 5.1, it's on.
Digital outputs would allow me to use receiver DACs, if I got a surround receiver, but there is no digital connection for DVD-Audio or SACD. So if I upgrade my DVD player, I can improve DVD-V DACs, as well as DVD-Audio DACs, and maybe have the addition of SACD support.
