HDMI Audio Output quality. No Auto. Always 7.1 input?

[Moiz Mian]

So how does this work exactly? We have the option for stereo, 5.1, 7.1, and dolby digital. Now, whatever I select becomes static throughout all media. I just have it set to 7.1 for now, but whenever I have my tv playing, my receiver shows the input and output as 7.1, or the other day i popped in a bluray with DTS HD 5.1, and my receiver showed input and output as 7.1 still. How is that possible? Clearly the input can't be 7.1. Is there something I'm missing or does the xbox need a firmware update to allow Auto