1. You can specify whether Media Center uses the Stable or Latest update channel in the
Help→Updates menu. It is also possible to disable updates there.
Whether you need them or not really depends on how you use the program.
I can certainly understand why someone may wish to stick to a version that works for them and not upgrade until they encounter a problem that requires it.
2. You don't need to pick the device in the Windows Control Panel - Media Center's output is independent of the Windows settings. (you can play to multiple devices at once, for example)
I would generally recommend using WASAPI these days.
3. This is a little tricky, but I'll try to explain it clearly:
- By default, Media Center converts all formats to PCM, including DSD. The internal rate used is 1/8th that of the DSD rate (which is fine, since it is converted from 1-bit to 64-bit) so for 1xDSD (DSD64fs) that is 352.8 kHz. This is done because you cannot process a 1-bit signal, it needs to be converted to a multi-bit format.
- DSD Output Encoding is an option which converts all PCM playback inside Media Center to DSD. That includes the above DSD→PCM conversion. This is done because it allows you to apply processing to the multi-bit PCM signal, and then output it as DSD for DACs where giving them a DSD input sounds better than PCM.
- Bitstreaming, whether DSD or another format (e.g. AC3/DTS) is the option to bypass all processing inside Media Center and output an untouched signal to your playback device. This means that you cannot do any processing to the signal (e.g. room correction, volume control, EQ, upmixing/downmixing) and that your playback device must support that format or else you will receive an error.
4. If you try to play a 4.0/5.0/5.1/7.1 etc channel file to a 2 channel device, depending on how that device handles the input you will likely either receive an error and it won't play at all, or you will only hear the left and right channels.
JRSS mixing will downmix those formats to whatever you specify (e.g. 2 channels) so that you don't receive any playback errors, and things won't sound weird.
A common issue would be if you tried to play a 5.1 DVD to a stereo device without using JRSS mixing, you will only hear the left/right channels and none of the dialog, since that is typically all sent to the center channel.
Keep in mind that if you enable bitstreaming for DSD, you will not be able to downmix 4.0/5.0/5.1 SACD discs, even with JRSS, since bitstreaming bypasses all internal processing.
5. My personal opinion is that once you convert to a multi-bit format, audio should stay multi-bit. The conversion from multi-bit (PCM) to 1-bit (DSD) is not a lossless process.
However that is not a universal opinion, and many people still seem to prefer converting everything to DSD.
So as we have established above, unless you use bitstreaming, everything will have been multi-bit at some point during playback.
I don't hear an appreciable difference in quality between bitstreaming to my DAC (a Benchmark DAC2 HGC) or having Media Center convert SACD to PCM.
I use a number of the processing options available in DSP Studio, and wouldn't want to give that up just to enable bitstreaming even if there was a slight difference.
Volume Leveling alone is enough for me to convert everything to PCM.
You can of course use all the DSP features if you then use DSD Encoding rather than DSD Bitstreaming, but as I said above, my opinion is that it's best to stay multi-bit rather than convert that back down to 1-bit.