I started to use my xbox 360 for a DVD player in my living room, and immediately noticed that there was no sound when playing DVDs. The sound in games was fine. After a quick look on the internet I noticed that I was not the only person with this problem... and a solution to it took some digging.
What is happening is the xbox thinks that it is playing the DVD to a monitor rather then a TV cable, so it doesnt transmitt the sound... wierd because the games dont care and transmitt sound reguardless. Anyway the solution is simple but difficult to discover because it is found in the Display settings and not the Audio settings. This all came about when xbox updated the console with Display Discovery feature so you could better utilize specialized displays and monitors with your system, however it crippled it for many.
The Solutions is to hit the Dome button on your controller and scroll over to the system settings menu. In that menu there will be a display option, choose that menu and look for the Display Discovery and change that to the option it is not set to.
hope that saves someone some headaches in the future
