As of now, you are correct IF the audio is PCM.
I submitted a ticket with Roxio but have yet to hear back. Forgive me, but I am very skeptical right now whether or not they will actually respond to me. I'm sure it will be fixed but it is typical of a company to not even respond when they don't have anything to offer... It would be nice if they just told me, "we are working on it", just to let me (and others) know they are aware and working on it, but alas, nothing yet.
Does anyone know if Toast can be used to convert the PCM audio of these particular music video files to Dolby Digital?