Since latter versions of the Mac OS, Snow Leopard, I have had a problem with digital audio. For example, if I wanted to output digital audio to my stereo from VLC, by choosing menu item, Audio; Audio Device; Built-In Output (Decoded Output) and then would start a new movie, VLC would crash. When I restarted VLC, there would be no sound and the option for choosing Built-In Output (Decoded Output) for digital sound would be greyed out. I would have to quit VLC, open Activity Monitor and force quit "coreaudiod" and then restart VLC before I could get audio again. This happened each time I started a new movie, if I chose regular (non-digital) audio, or if I quit VLC. When I upgraded to newer versions of VLC, like 1.1.9 or 1.1.11, the option for Audio; Audio Device; Built-In Output (Decoded Output) wasn't even available, it was greyed out constantly.
To compound things, the 10.6.8 update to Snow Leopard messed up digital sound. This was fixed in a supplemental 10.6.8 update, but the problem remained in VLC. The initial release of Mac OS, Lion, also had this problem with audio. I hear it has been fixed in subsequent updates of Lion, but I haven't upgraded yet because I am not an early adopter. I choose to wait until things get very stable, then I upgrade.
This all changed in the nightly build of VLC 1.1.12. Finally, the option for digital audio is there, and the program doesn't crash when you play new movies, if you switch to analog sound or quit the program while using digital sound. I thought this might be good news to some Mac users (like me) who experienced (or are still dealing with) this problem, and useful info to the VLC programmers who fixed this problem.
THANK YOU, VLC programmers!