It does what it promises without needing any special setup. Obviously, it doesn't have the options that a receiver with a toslink/optical input and 5.1 RCA analog output would have, but it is also much cheaper than something like that. The selection of the input source (optical 1, optical 2, and 3.5mm jack) is done manually, as is the switching between 2.1 and 5.1 for the audio output. It is a decent solution if you can't spend 250€+ for converting optical digital output to analog RCA.

No problem with Dolby Digital. There are some issues with DTS, as well as with the extensions of DD, such as Plus and EX. It gets a bit confusing there. The chip is for Dolby Digital and DTS, but other formats are simplified through optical.