Same problem on e9180f. Bluray drive plays dvds ok and can output sound via SPDIF, but playing a Bluray disc can only output sound via the analog plugs and not SPDIF. The truth is, the bluray video on HP player looks worse than on my PS3, so I don't even use it for Bluray movies.
I agree that the ps3 plays blu-ray better. However, spending the money for a blu-ray; we at least expect HP to fix the problem. It's been a week now and I should email HP to see what their stats are. In addition, I installed power dvd on this machine and it works just fine (SPDIF and all). So there is a solution if HP does not fix their software. I also attempt to leave a negative feedback, but it did not get posted yet. I'm wondering if the reviews are filtered base on what they want others to read.
Alright, it's been a few month now. HP escalated this to their case manager and engineering team and still nothing. However, I did find ArcSoft's TotalMedia Theatre to be way superior then HP's mediasmart. So I decided to let the case run and stick w/ ArcSoft's software. I heard ArcSoft is what Dell uses for their system.