Hi
I have mpg4 codec, and yes I can hear your Star Wars demo.
I create video, with complex multi layer sound, in Premiere and everything works.
I guess that there's no reason that I can't just leave it at Stereo 16 bit, while I'm recording the video, I don't really hear the difference anyway and if I edit it and remake it, and save in a normal format it will probably work.
It only takes a minute or so the switch it back an forth.
It's typical of MS that they would have it not work at what is pretty much the standard settings for everyone that I know.
I suppose that an XBox doesn't support surround sound, so their app doesn't either.
I always used FRAPS for this stuff but it doesn't work well with Windows since Windows 7 and I don't think they every update it anymore.
Mike