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Onkyo 608 HDMI issue, help!

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Hey All,
I am in some serious need of help.. I have finished building my HTPC Today but unable to correct sound from my intel i3 HD Graphics via HDMI .. Below are the Specs of my HTPC:
Silverstone SG06 Case
ZOTAC H55 ITX WIFI motherboard
Intel i3 530 Clarkdale
4GB Crucial DDR3 RAM
40GB Kingston SSD
Windows 7 Home Premium
After installing windows updates I went to the Zotac website and installed the intel HD graphics and HD sound for my motherboard.. I also installed the Realtek codecs.
I have the HDMI running from my Zotac motherboard into the Onkyo 608 Amp and then from the AMP to the TV via the HDMI out..
The problem is my AMP keeps flickering "HDMI, Multi Channel" on the front visual display of the amp and its actually making a clicking noise (cutting out and then coming back) . " you here a little bit of the audio but then cuts out and then comes back...and the HDMI and PCM sign flashes a few times and for a few seconds there is sound and then it cuts out again....?
When I hit display button on the remote whilst playing a .mkv file with DTS sound it says input 5.1 PCM and then Multi Channel or something like this but keeps flickering.. ?
Can anyone please advise me as what I need to do? Am I doing anything wrong ..? Is there a setting in the Onkyo 608 or anything I need to do to windows to get everything working perfectly? Do I need to disable the onboard sound card via bios or something to prevent maybe a conflict???
Also just to note my amp is set to HDMI - Through mode but I have tried all the other modes and the same thing happens..
Interestingly enough I installed XBMC onto my windows 7 and when I played the same .mkv file it actually displayed DTS instead of Multi Channel on the visual of the amp and played fantastic surround sound untill it started cutting in and out again flashing HDMI on the front visual of the Onkyo 608.
Please can you guys assist.. Other options I am considering is:
1 - Install linux (Ubuntu 10.04 LTS) and XBMC and see how that goes or
2 - Keep windows 7 and just purchase an ATI 5770 which supports DTS HD MASTER and DD 5.1 TRUE HD.. or will I have the same problems with the card that I am already having?
This is very annoying. please please try and help me out guys :)
Thank you in advance.. :)
Thanks..
 
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