I stand corrected, it does indeed look like a lot of TVs wont just pass through untouched audio over HDMI. How frustrating. Can you not just plug all of your devices (xbox, sky etc) in to the TV and then tell the TV to output audio over optical. Or does the TV down mix all audio, not just HDMI?
In all honesty, I'm not sure - when I change the option in the Xbox ONE or Sky with my current SB setup to output in DTS, it just goes quiet - it has been a few months since I've had the SB and on the day of installing it, I spent a good 2 hours tweaking menu options on the TV, devices and SB and ended up just going with the ARC option as it was most user friendly. The soundbar does indeed output in DTS if I connect DIRECTLY via optical or pass a device through ARC but then the lag happens and you need to manually select the output on the SB remote, something I really don't want to do.
I have just sent a fairly long email to LG support but I am happy with what I have, I knew I wasn't getting a full surround sound system, I just wanted a better speaker which I have no complaints about. That said, I paid £270 for this and I am wondering if one half the price would have been good enough for me.
As for my setup - I'm just a bit clueless and out my depth but I'll try to explain as much on here as I can!
I have a 3D Panny TV. This has 4 x HDMI ports, of which HDMI2 is ARC, it also has an optical out port.
I have Sky HD connected to HDMI1, Xbox to HDMI3 and Nettop to HDMI4 - all of these devices also have an optical out port. From the HDMI2 port I have an HDMI cable going in to the ARC port on my Soundbar.
This setup allows me to have everything automatic - it outputs in stereo for all 3 devices but I do not need to touch the soundbar setup at all, nor use the soundbar remote.
I had initially (wrongly) thought that by simply taking the optical out from my TV in to optical in on the soundbar this would work. I can't remember if it outputs sound as it was a few months ago but I don't use that option so I am assuming it did not work.