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Yes this will work. This devices puts out Dolby TrueHD which is a lossless audio. You can change your output as well. If your digital box only supports Dolby 5.1 you will only get Dolby 5.1 however. The movies you play through direct USB will have the option for TrueHD sound when used with the 5500W. You will have a better experience if it supports up to TrueHD on the movie being played. Coping, ripping, or any of that jazz will screw up your experience due to compression rates and other things out of context of your question.
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