Boxee Box v1.1 update started to roll out that users with surround sound systems found a major issue with it: besides the removal of volume controls (confirmed to return as an optional setting in the next update), there was an undocumented change to the way it handled stereo PCM audio sources for users with surround sound systems. Instead of sending it on to the user's receiver as a two channel source so it could be processed to fill all the speakers, it is sent as a Dolby Digital 5.1 audio source and only plays audio through the front left and right speakers, with no audio coming from the center channel or rear speakers. That's a major problem for people trying to watch Netflix streams, MLB.tv, listen to certain lossless audio files or any other stereo audio source and enjoy an audio experience that takes advantage of their setup.
A Boxee developer on AVSForum indicated the change was due to a licensing agreement between the manufacturer of the box, D-Link, and Dolby, and would need to be left up to them for a fix. We've reached out to both Boxee and D-Link for word on their issue and while we haven't received a detailed response (expect more information tomorrow at the earliest), there is a notation on the JIRA bug tracker for the issue by "yuvalt" indicating the team is working on a fix for this and other issues which will hopefully be available within days. Check out the forum threads for more detail on the issue as well as temporary workarounds, we'll let you know if we get an official response on why this is happening and if / when there's a fix incoming.
Update: Per Boxee VP of Marketing Andrew Kippen, the problem was the result of a "miscommunication" and a fixed update for that and the volume control toggle will roll out this week. Check after the break for his words verbatim, but owners of the Box can rest easy knowing their surrounds will be back to work shortly.