Home Theater PC won't capture sound with Radeon AIW 9800

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I've assembled an AMD 64 2800 with Radeon AIW 9800 and Audigy Platinum hooked up to a DLP HDTV with DVI. After hours of config., everything works except VOD and recordings have no sound. DVD plays great, all Windows sounds, even just playing TV sound works fine etc. (hooked up through Optical Out on front panel of Audigy) but no sound on capture. Anyone else have this problem?
 
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