phenigma,
as a note, there is a known bug that causes the switching of the inputs to fail, IF the MD thinks the display is not yet turned on. For example:
You selected turn off display
Next time you try to play something from an external device, it will switch to the external device and a few seconds later will switch back to the MD and stay there.
To circumvent that problem try:
Turn on the device
If the input ends up wrong, use the Orbiter to turn the device off. After that, turn it back on, and everything should be fine.