One wire solved both audio issues

The two biggest complaints since the release of the newest firmware are:

  1. No Dolby Digital sound (5.1) at all through network shares (works fine through a media server or local storage)
  2. No AVI sound at all through network shares (works fine through a media server or local storage)

I connected my laptop (the source of the video file) to my wireless router with an ethernet cable, and it solved both audio issues. Both of my WDTV SMP boxes are still connected via wifi, but connecting the source of the video file (my laptop) with an ethernet cable to the network (the router) completely eliminated both issues. I can say with certainty that the two audio problems above are related to wifi.

That makes perfect sense. 

If both the “Source” and “sink” are WiFi devices, you need to remember that your available bandwidth is basically cut in half.

WLAN is a half-duplex arrangement.  So the SOURCE uses half of the bandwidth to SEND the packet to the WiFi hub, and the WiFi then re-transmits the packet, hence half the bandwidth.

So you better have REALLY good WiFi capabilities to stream decent bitrates.

I can stream 1080p .mkv over network shares via wifi with no issues. Surely 1080P .mkv requires more bandwidth than a ten second .avi clip in standard definition. I’m not saying bandwidth has nothing to do with it, but I have a brand new high end router with a video stabilization setting, and it doesn’t help at all. Also, since you can play the files perfectly through a media server over wifi, a firmware update to bolster the ability of network shares over wifi is desperately needed.