I'm thinking of buying a Sony RDR-HXD870 DVD/HDD recorder and was planning to connect its HDMI socket to my HDTV-ready LCD and its opitcal audio output to my AV receiver to achieve 5.1 sound from DVDs.
(HDMI>HDTV and OPT>AV receiver)

But... reading the DVD/HDD manual online, it states "If the HDMI OUT jack is connected to equipment not compatible with Dolby Digital signals, the PCM signlas will be automatically output even when you select "Dolby Digital".

My HD-ready LCD TV doesn't seem to be Dolby Digital compatible (why would it be with 2 speakers?) and so it would appear I would not be able to hear 5.1 audio output through the AV receiver (only PCM stereo).

Can anybody confirm that they have a HDMI>video and Optical>Audio set up working without routing the video via a receiver?

It means it sends PCM stereo via the HDMI lead, NOT the optical - don't worry it will work fine.

Along with all recent Sony instruction books it's badly written and misleading.

Phew - that's a relief.
Ta ever so!