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In answer, the up and down buttons show the volume change - which is at maximum. It cannot actually be changed with digital out.
Having played with it, I now know the setting which is a problem - in EyeTV, enabling Digital Optical Out, rather than System Sound. You need to enable Digital Optical Out to get 5.1 sound on the channels that have this, otherwise it is always two-channel. If however the audio output is set to System Sound there is no problem with the handover to Front Row using Remote Buddy (or if there's no playing EyeTV window of course).
Having played further, this also affects DVD Player. Remote Buddy and EyeTV and Digital Out seem not to play well together.
I wanted to give Remote Buddy another go as I am impressed by the fix you've put together for EyeTV with Candelair. (And unimpressed that it's necessary and not supported within EyeTV!) However, this same sound issue still seems to be a problem. No problem if it's a low priority but I am posting in case you have addressed this and I have set up incorrectly or sub-optimally.