When doing a new install (dvd i386) of RC1, I did notice the volume in the AV setup wizard was around 20% instead of the usual 80% area. I changed it there in the AV wizard. I've just played one video and the volume was fine. Audio is SPDI/F optical to an uncontrolled AV Receiver (it's unsupported so have to manually create it).
I did notice that starting with beta 4 and still in RC1, that when starting the KDE desktop, the initial desktop is ready sound is badly saturated (major clipping).
Also DTS volume worked in the AV setup wizard! Whooop!
Roy - that's interesting, I have noticed that as well - everytime I go into KDE for the first time, the intro sound it plays is bad. However, I didn't interpret this as saturation or clipping, more some kind of hardware issue that doesn't present in LMCE itself. This was because it sounds like the sound is actually being rapidly gated (as if the audio stream is rapidly being cut off and then re-enabled). I can see how it could be clipped, but it does actually sound like the sound is stopping completely then coming back, and the cycle is quite slow compared with what I would expect for saturation - like 10Hz (complete guess!) rather than faster and quite random "cracking" distortion.
How does this compare with yours? Are you certain its clipping? I had thought I had some hardware conflict between LMCE and KDE, which is why I didn't hear the problem in LMCE itself....