Hello!    
I have 2 8800GT cards in SLI.  I'm looking to switch to the ASUS EAH4850/HTDI/512M Radeon HD 4850 512MB 256-bit GDDR3 PCI Express 2.0 x16 HDCP Ready CrossFire Supported Video Card.  the reason I am doing this is because i am more of a HTPC guy than a gamer....although, I enjoy both.  So, I want a card that can handle both.  I find Nvidia lacking in the HTPC department in terms of HDMI pass through.
 
Here is my question.  The HD 4850 has HDMI with audio.  Do I need to have a sound card plugged into this card in order to pass the sound through HDMI or does the sound card has it's own built in audio decoder?  I have a blu ray player in my pc and looking to pass the new high def codec through PCM/HDMI to my Onkyo HDMI 1.3 reciever.  

The 3800 and 4800 series cards both have their own audio decoders and use a DVI-to-HDMI adapter that is capable of passing sound.  The 3800 series cards only supported 5.1 I think, but the 4800 series I know supports 7.1 digital surround sound.  Pass it straight through the adapter and cable to your receiver and enjoy 7.1 digital surround sound.
 
EDIT:  I'll go ahead and admit that I haven't tried this personally.  I've researched this since I was interested in possibly doing the same and this info is the fruit of my research.  If I'm wrong, somebody please correct me as I have a personal interest in this also.  I'm pretty sure I haven't misinterpreted my research though.

Sweet! so I can ditch my sound card and just use HDMI.  WIll it pass throuhg the new blue ray stuff such as HD-DTS MA?  I have a reciever that can decode it (onkyo 606)

It won't pass DTS-HD MA or DD TrueHD as bitstream, but it will pass them already decoded as multi-channel LPCM. Your receiver accepts LPCM over HDMI so no worries

OK that's what I thought.  Thanks!  
 
However, is there a certain way I need cyberlink set up in the audio options to ensure that it is decoding properly before sending to the HDMI?  There are a few options (DTSmix, AC3mix, SPDIF, PCM etc.).  Should i have it on the SPDIF pass through or have it set to PCM?  In my past experience SPDIF just means pass throgh the optical cable and keeping it's native output that I have selected in the DVD menu.  However, i'm not sure if that implies over HDMI because I have always used that option with an optical cable.  If I select the PCM option in the cyberlink menu, I'm not sure if that is correctly encoding the HD format that was selected on the Blu Ray disk.
 
Does anyone know how the cyberlink audio needs to be set up in order to properly pass these HD signals (HD-DTS, etc.) over PCM/HDMI?
 
Thanks!
Thanks!

Not sure about the Cyberlink, but when you have the ATI card, one of the options in the system sound properties (playback devices) should be ATI HD audio. If that one is selected, it should pass the audio straight through to the HDMI.