I have experienced a noticeable background noise whenever I paused the music (or any audio output) with DDL turned on. My DDL encoding device is Asus U3 USB external soundcard. I'm positive that it's encoding the true DD signal over to X-tatic SCU because the Dolby Digital LED was lite.
Here is a video: VVVVVV.youtube.com/watch?v=jpHTrHZca9M (please change "VVVVVV" into "www" as the system does not allow noob to post an URL...)