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this is incorrect; practically all AC'97 compliant chips resample to 48kHz (see spec at intel site). This includes all nVidia Soundstorm implementations, as well as virtually any other onboard sound solution.
I do not believe this is accurate when referring to Digital passthrough regardless of what type of content is involved. Perhaps you have a link....
For analog it is completely accurate of course, the incoming digital signal is upsampled to 48KHz before converting to analog, provided it is not already at 48KHz.
There is no analog conversion in this case.
Edit: In fact I believe I have found why our opinions differ on this matter. Your opinion appears to be valid for the AC97 1.X specification (pre-2000), while the 2.1 and 2.2 spec (2000) adds "variable sampling rate capability".
Check page 28 of the AC 97 2.2
specifications for some information on how variable sampling rates may be done. Also note that the current spec is 2.3.
Heck, I'll quote the part that caught my attention:
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The Variable Rate Audio bit in the extended audio status and control register must be set to 1 to enable variable sample rate operation. Setting VRA=1 has two functions:
-Enables PCM DAC/ADC conversions at variable sample rates by write enabling sample rate registers 2C-34h.
-Enables the on demand CODEC-to-controller signaling protocol using SLOTREQ bits that become necessary when a DAC's sample rate varies from the 48KHz AC-link serial frame rate
It seems somewhat clear (Intel also has a table below this section that shows setting the SLOTREQ bits to 0 or 1 allows for the sample rate registers to not be forced to 48KHz, in other words made "writable") that variable sampling rates can be supported in revision 2.2, which the ALC658 exceeds as it's a rev2.3 part.
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An exception was some CMI8738 chip, but then I'm not sure if it was AC'97 compliant, and also: it's analog performance is worse than terrible.
Be very careful making sweeping statements about CODEC performance when the motherboard implementation/placement of the CODEC can cause the output quality to vary drastically.