The Apple TV has multichannel sound support so all you have to do is hook up a receiver and away you go right? Well... not exactly. The reason is because there are several different kinds of digital surround sound and several ways to encode videos with it and the Apple TV is finicky about which it supports.
There are basically two ways of playing videos on the Apple TV if you want to stream them from a server on your network. Through the built in Quicktime which powers most of the players on there from iTunes to NitoTV to ATVFiles (the latter being third party players you can install so you can play videos other than apple sanctioned ones). The second way is to install XBMC (a third party media center originally made for the XBOX).
Then there are different types of videos you can watch. DivX, MKV, and M4V\MP4 are the main ones. Those in case you don't know... are container formats. Each of them can contain the same or different types "codecs" (compression\decompression). The main codecs in use are either Apple's (h.264), Microsofts, or DivX 6, or x264 (used by MKV and DivX7+ which basically are the same thing).
Then there are the sound standards, AC3 (dolby digital), DTS, and AAC 5.1. The first two where designed for optical discs and most DVDs come encoded with AC3 and some with DTS. The last one is mainly used by Apple for their videos such as the trailers on their trailers site. There is also MP3 5.1 but I doubt anyone is using it. Then there is the legacy dolby pro logic which comes in pro logic 1 (4 channel) or 2 (5 channel) matrixed flavors. Neither of which are as good as the digital formats with their discrete channels and subwoofer channel.
Well first of all performance wise I notice if you want to play 720p HD which is the most the Apple TV can handle the best performing video codec is actually DivX6. But if the soundtrack on that DivX file is encoded in AC3 and you play it through a quicktime based player white noise (the sound of undecoded dolby digital) gets played through your speakers. If you encode an MP4\M4V with only an AC3 track you get no sound at all.
I have noticed however if you encode an MP4\M4V video with AAC Dolby Pro Logic II as track one and AC3 as track two the Apple TV uses the AC3 track provided you either have a reciever that accepts HDMI input or you connect the optical out from the Apple TV directly to the receiver. Then you get dolby digital.. I confirmed this by re-encoding a small test file to M4V with Dolby Pro Logic II as the first track and AC3 as the second track.
AAC 5.1 is supposed to be a more advanced dolby digital codec than AC3. However, it is not supported by most if not all consumer receivers out there. The Apple TV simply converts it to Dolby Pro Logic II (a new revision of the old surround sound). Which while some people are satisfied with that isn't the most ideal thing. So you don't get 5.1 with any of apple's trailers nor from movies you may buy or rent from iTunes. People say you need a special sound card that has jacks in the back for 5.1 (e.g. PCI cards for the PC) out rather than digital pass through which is more common.
So when it comes to SD (standard definition) files I am now having to go with M4V with Dolby Pro Logic II as the first track and AC3 as the second track. At least that way it's not just through XBMC so the receiver sees and uses the AC3 track. But this means I'm going to have to re-rip my movies as I had done them in AAC 5.1 thinking it would just work when we got a Dolby Digital sound system.
I'm also going to have to transcode my HD DivX files. At least their soundtracks anyway. I'm going to end up testing to see if this would work with DivX6 or M4V\MP4 (whichever works best). MKV files have terrible performance on the Apple TV so I'm going to have to transcode those to the former. It's up in the air which combination of formats I'm going to end up using for HD.
However, I think with a new Mac Mini it's simpler to get multichannel digital audio out and it has more power to play those 720p MKV files. I would like to upgrade my family to that in the future.
There are basically two ways of playing videos on the Apple TV if you want to stream them from a server on your network. Through the built in Quicktime which powers most of the players on there from iTunes to NitoTV to ATVFiles (the latter being third party players you can install so you can play videos other than apple sanctioned ones). The second way is to install XBMC (a third party media center originally made for the XBOX).
Then there are different types of videos you can watch. DivX, MKV, and M4V\MP4 are the main ones. Those in case you don't know... are container formats. Each of them can contain the same or different types "codecs" (compression\decompression). The main codecs in use are either Apple's (h.264), Microsofts, or DivX 6, or x264 (used by MKV and DivX7+ which basically are the same thing).
Then there are the sound standards, AC3 (dolby digital), DTS, and AAC 5.1. The first two where designed for optical discs and most DVDs come encoded with AC3 and some with DTS. The last one is mainly used by Apple for their videos such as the trailers on their trailers site. There is also MP3 5.1 but I doubt anyone is using it. Then there is the legacy dolby pro logic which comes in pro logic 1 (4 channel) or 2 (5 channel) matrixed flavors. Neither of which are as good as the digital formats with their discrete channels and subwoofer channel.
Well first of all performance wise I notice if you want to play 720p HD which is the most the Apple TV can handle the best performing video codec is actually DivX6. But if the soundtrack on that DivX file is encoded in AC3 and you play it through a quicktime based player white noise (the sound of undecoded dolby digital) gets played through your speakers. If you encode an MP4\M4V with only an AC3 track you get no sound at all.
I have noticed however if you encode an MP4\M4V video with AAC Dolby Pro Logic II as track one and AC3 as track two the Apple TV uses the AC3 track provided you either have a reciever that accepts HDMI input or you connect the optical out from the Apple TV directly to the receiver. Then you get dolby digital.. I confirmed this by re-encoding a small test file to M4V with Dolby Pro Logic II as the first track and AC3 as the second track.
AAC 5.1 is supposed to be a more advanced dolby digital codec than AC3. However, it is not supported by most if not all consumer receivers out there. The Apple TV simply converts it to Dolby Pro Logic II (a new revision of the old surround sound). Which while some people are satisfied with that isn't the most ideal thing. So you don't get 5.1 with any of apple's trailers nor from movies you may buy or rent from iTunes. People say you need a special sound card that has jacks in the back for 5.1 (e.g. PCI cards for the PC) out rather than digital pass through which is more common.
So when it comes to SD (standard definition) files I am now having to go with M4V with Dolby Pro Logic II as the first track and AC3 as the second track. At least that way it's not just through XBMC so the receiver sees and uses the AC3 track. But this means I'm going to have to re-rip my movies as I had done them in AAC 5.1 thinking it would just work when we got a Dolby Digital sound system.
I'm also going to have to transcode my HD DivX files. At least their soundtracks anyway. I'm going to end up testing to see if this would work with DivX6 or M4V\MP4 (whichever works best). MKV files have terrible performance on the Apple TV so I'm going to have to transcode those to the former. It's up in the air which combination of formats I'm going to end up using for HD.
However, I think with a new Mac Mini it's simpler to get multichannel digital audio out and it has more power to play those 720p MKV files. I would like to upgrade my family to that in the future.