I have selected HDMI audio output, and it works great for movie discs, but for video files, audio still comes out of my system default output, IE my analog speakers.
Sad thing is, while HDMI audio should go to a 5.1 HT that's properly laid out around my TV, where the video is to be seen, my analog speakers are a small 2.1 set on my desk, so you can guess it's definitely not a good experience.