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Do all the HD formats re-encode for the compressed stuff? Or is it actually recorded on medium. Does blu-ray do it different than HD-DVD?
Bluray players certainly don`t re-encode the audio I know that much for certain as the format deals with the Dolby codecs differently to HD DVD. Quite why both formats handle Dolby differently seems to be related to packetizing constraints in HD DVD which lead to the necessary mandate of DD+ for the format. Direct your eyes to page 6 of the whitepaper that breaks down how the codecs are implemented in each format.

http://www.dolby.com/assets/pdf/tech_library/DPlus_TrueHD_whitepaper.pdf

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Is this a toshiba (who seems to build almost every HD-DVD out there) only thing?
It`s certainly what the Toshiba and RCA (which was a re-badged A1) do yes. DD+ is converted to PCM and then to 1.5mbps DTS for use over coax/optical. The Xbox 360 I believe downmixes everything to 448kbps (it might even be lower than that actually). Microsoft have said they`re looking into implementing a DTS re-encoding solution for the 360 next year available I`d imagine in its next downloadable update. I`m actually not aware of any complaints about the real time encoding going on in the Toshiba units though.