When we first heard about the Kanex HDMI + digital audio converter a few weeks ago, I was eager to give it a trial run and see if it managed to deliver on the promise of integrated audio with HDMI video. I've been playing with the $70 unit for a few days now, and the answer is a qualified yes: it does the job, but depending on your home theater setup you may be able to get by with a less expensive option.

The digital-audio Kanex unit ships without a manual and is largely self-explanatory (although the company has now posted a basic user guide and FAQ) -- a female HDMI port on one side of the roughly iPod-sized unit, and three male cables coming out the other side. The cables connect to the mini DisplayPort, optical audio out, and USB port of your Mac; while Kanex does sell a $60 unit that handles audio over USB, this version only uses that connection to power the adapter and does not provide a USB audio interface. If you're running short of open powered USB ports you might opt to plug it into a USB power adapter instead.

In operation, there's not much to worry about: I plugged in all three ports to a unibody MacBook Pro and connected an HDMI display, then went to the normal Mac OS X Displays preference pane, where I found a full assortment of resolutions for my enjoyment. The top few 'television' options may vary with your connected gear; on my test set (a Vizio 42" 720p display) I was able to choose 720p and, oddly enough, 1080i and 1080p. Below that you have resolutions ranging from 640x480 up into the 1600x1000 range.

Yesterday, our buddy David Chartier at Ars and Sam Oliver at AppleInsider both publicized an issue that's been burning up the support boards for a while now: iTunes video rentals and purchases in HD are flagged for HDCP control, and in cooperation with the new Mini DisplayPort connector on the MacBook and MacBook Pro unibody models, those movies and TV shows are refusing to play back on non-compliant external displays.

In this case, 'compliant' means HDMI or recent-vintage DVI, but even monitors or TVs that support HDCP may not properly negotiate with the DisplayPort connector to give iTunes and QuickTime the all-clear signal (if so, quitting and relaunching iTunes once the display is hooked up may clear the playback hold). Equally annoying: HDCP is only supposed to apply to 'high-value' digital streams, meaning standard-def purchases and rentals on the iTunes store should be out of scope... but some reports indicate that both the HD and SD instances are flagged, blocking playback on anything but the laptop's internal display or a straight-thru HDMI connection. Argh!

While Apple TV users with unconventional output setups have been dealing with this aggravation since the beginning of the year, MacBook and MBP owners have largely steered clear, even as the HD content on iTunes became available for playback on the laptops. Now that the hardware and software have come into sync on the unibody models, Apple's compliance with HDCP -- a necessary but appalling condition of the content companies that deliver the HD movies and TV shows -- is beginning to close out the 'analog hole' and cause real aggravation for laptop owners with legitimate use cases. Talk about a bag of hurt.