I just wanted to say THANK YOU!!...to whoever fixed this bug in VLC 0.8.6d:
* Linux: Fixed S/PDIF passthrough with ALSA
Finally ac3 sound works now!! I just had to turn on these settings:
* Use S/PDIF when available: ON
* (Advanced options) Audio output module: ALSA audio output
* ALSA Device Name: hw:0,1
I'm using Fedora 8. I've been waiting 10 months for this, now I finally don't have to reboot to Windows to run VLC there