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Well what I meant were, that it actually works with pulseaudio :-) All you have to do, is to select the right output (ATI hdmi) within the pulseaudio control-panel.
I don't mean to hijack this person's thread, but I am having the same problem. I am running openSuSE 11.3 with PulseAudio. Sound was working fine before installing the fglrx drivers (10.6) from ATI, but afterwards the sound is not playing from video players. It still plays fine from other areas. In the KDE sound management, my sound card is still selected as the preferred method for playing sound, but this seems to have no effect on which device is actually used.
I have been banging my head against this wall for what seems like years. Open source radeon driver gives me HDMI video but no sound through the telly speakers. So I am trying fglrx but the same happens.
Kernel 2.6.35, which I built myself, fglrx 10.9, ALSA 1.0.23.
I have a radeon 4670 and lspci says I have a RV710/730 which I think is the HDMI soundcard. I see two soundcards in alsamixer and I have the one labelled "spdif" unmuted.
In Xorg.0.log I get
(WW) fglrx: No matching Device section for instance (BusID PCI:0@2:0:1) found
which I do not get with the radeon driver. Maybe it just needs a Device section in xorg.conf, but I have no idea what to put there.
HDMI audio works here, too. You need to select the correct output in the pulseaudio manager (or instruct it to send audio to all available outputs, like I do). If you don't use pulseaudio, make sure your *digital* output is unmuted in alsamixer.