I have an Arcade as well as the new Star Wars Limited Edition console. I have the same problem on both. The Dolby Digital 5.1 is selected, however when I switch the machine off/on, it plays Stereo. I have to switch to stereo and back to 5.1 for it to play 5.1?
Why does it only sometimes SAVE my 5.1 setting? Xbox are not plugged out from the mains.