Finally! I solved the supposed problem playing my DTS and DD multi channel files. The problem was that I wanted to verify my pre/pro is getting a bitstream and can decode all the formats. After reading this post:
http://yabb.jriver.com/interact/index.php?topic=69945.0 I tried changing the file type settings from automatic, to using the JRiver video decoding. That did the trick. With my board, the only setting I need in DSP is to set it to output 24bit due to my hardware. If I don't set that, and attempt to play a 48 bit file, MC17 crashes hard.
All along I have been getting bitstream once I updated the AMD drivers. I just did not realize that the automatic setting in file type, causes MC to decode the file and send a PCM signal to my pre/pro.
In summary, here is what I had to do with the Asus E35M1-M pro to get it to work properly for a HTPC.
Disable the HD audio in the BIOS. This will leave the system with the AMD HD audio hardware and remove the Realtek HD audio. I could never get that system to work.
Ensure the latest AMD video drivers are installed, which also contain the HD audio drivers.
Install MC17.
If you want your pre/pro to decode DTS and DD files vs. having MC send a PCM stream, modify the file types for wav and ac3 from 'automatic' to use JRiver video engine. With some files, If found that the JRiver audio engine must be used.
In the case of this board, if you don't enable DSP to output 24bit, and you attempt to play a 48bit file, MC17 will crash.