I bought WDTV Live about two months ago and after I was not able to get the sound right from my movies I started going through all the forums and spending much time learning about different video and audio formats (I spent all this time on this because I was FORCED, not because I wanted to). First there was that issue with movies in mkv format with header compression. OK, I learned how to convert the movies so that they would work with WDTV Live and fortunately it was fast conversion (and WD claims it is fixed in one of the latest firmwares but I would not know because I CONVERTED all my mkv movies already). And after that there was (and still is) an issue with movies in MP4 format. Again, after going through the forums and tiresome testings I discovered that the problem was with MP4 files that have multichannel AAC sound in them ( http://community.wdc.com/t5/WD-TV-Live-Ideas/Live-decoding-AAC-5-1-gt-PCM-5-1/idc-p/26209#M2343 ). Yes, I know now that WD stated that WDTV Live only supports stereo AAC but it is so well hidden and in small print that I have to think it was on purpose. And also, why am I as a customer obligated to know that MP4 is a container and that you can put any kind of video or audio inside it? WD stated that WDTV Live supports MP4 files (fully) and that is what I was checking when buying the product. I do not care what is inside it, if it is stated that it supports it then it should support all possible files that can be inside it. That is why I think that WD was falsly advertising this product and if I was not living in a banana republic I would definitely consider a lawsuit. Unfortunately, I cannot do that, or return the product, or get my money back but I can write a warning for all potential customers of WD. I want to mention that I contacted WD support but it is like talking to a brick wall, all they can suggest is to reset my unit and to update the firmware (when new available). Of course, it does nothing. Not to mention that they sometimes take more than two weeks to respond to email.
And today I have discovered that there is the same issue with wma format – it will play only stereo.
I can just say that I think WDTV Live is a falsly advertised piece of cr*p and I will never again buy anything from WD.
So, to cut the long story short, all you people who plan to buy WDTV Live and want to play MP4 files with multichannel AAC and WMV with multichannel WMA sound (about 99% in my experience) on your home cinema do not buy it because it will not work !!!