Its locked into NowTV and major UK catchup services (BBC, ITV, C4, 5, UK TV) albeit with a very limited app store.

We don't have it connected to anything other than TV. It has HDMI out only iirc, and audio settings are auto, PCM stereo, Dolby digital, Dolby digital plus, Dolby digital DTS, Dolby digital plus DTS, but we not tried it in anything other than stereo. The help mentions SPDIF, but I dont know if that generic or the hardware supports it.

What I like about Now TV is the ability to subscribe to a month, then immediately cancel, and then not have to worry about it auto renewing. Quite often, after you cancel, they offer you some deal, like 3 months entertainment for £4/month. I'm not a fan of subscription services, but this one works for me.