Ok, for those of you who just want it up and working, I’m including a quickstart section before we dive into the details:
Quickstart
1) If you have an ATI/AMD or NVidia card, you need proprietary drivers.
2) You need to activate your secondary screen. For Intel, this is done in the regular “Screens” dialog, and on NVidia this is done in the nvidia-settings dialog. (I haven’t tested fglrx.)
3) You need to select the HDMI/DisplayPort output in the sound settings dialog, which is quickest reachable from the sound indicator.
Can’t we switch audio output automatically?
Choosing whether to automatically switch to HDMI/DisplayPort – essentially, switching sound to use the HDMI/DisplayPort whenever that screen is activated – is not trivial. It is not obvious to me whether the user wants to do that, or not. And in fact, in Ubuntu 11.10, we did switch, but only for some cards. And we did not switch back when the screen was deactivated. After a discussion where different opinions were voiced, I reached the conclusion that given the current pieces of infrastructure in place, the best option would be to disable automatic HDMI/DisplayPort switching for Ubuntu 12.04.
The problem of four devices
As mentioned in an earlier post, much HDMI/DisplayPort hardware have phantom outputs, and there is no way we know what outputs are real until something is plugged in. With the new sound settings UI in Ubuntu 12.04, we finally have a good user experience in this scenario: Only the outputs that are actually plugged in and possible to activate will be shown.

Sound settings in Ubuntu 12.04
Video drivers
Most of the code to activate HDMI/DisplayPort audio is in the video driver, rather than the audio driver. Therefore, if this is not working, it is more likely that the problem is within the video driver.
It is also notable that the open source driver for ATI/AMD (called radeon), has experimental support for HDMI/DisplayPort audio, at least for some cards. It is disabled by default, but you can activate it by adding radeon.audio=1 as a kernel boot parameter.
Upstreaming notes
PulseAudio 2.0 is soon to be released (hopefully). PulseAudio 2.0 and Ubuntu 12.04 have the same feature set when it comes to HDMI/DisplayPort audio support.
The new sound settings UI in Ubuntu 12.04 has not yet been upstreamed.
You shouldn’t need prop drivers for ati or nouveau, if you have a new enough kernel.
For radeon though you have to add radeon.audio=1 to the kernel command line, but we are hoping to avoid having to do that soon.
Thank you for your comment. The information that the nouveau driver does not support HDMI/DisplayPort audio, was found here – no card is marked as being “done” for “HDMI Audio” there, and I believe that to be the official information. Is there more up-to-date information somewhere else?
I’ve patched the precise kernel to include the HDMI audio support for Evergreen cards (backporting this http://go.3v1n0.net/IM6Z3k and few other related patches) since I have an HD5650, but I don’t get the “HDMI / Display Port” in the control center (while it used to be there until few upgrades ago).
I get it in pavucontrol, but I don’t get HDMI audio output anyway…
I have yet to hear sound out my HDMI monitor’s speakers-
This goes for Ubuntu 11.4, 11.10 and now 12.04
Several times now I’ve installed the proprietary ATI drivers for 12.04 and they totatlly screwed up my HDMI video.
For some reason it was a big job to uninstall them and revert to the Canonical-supplied driver(s) – it’s one of the reasons I’m an early 12.04 user – the video/sound drivers screwed up the font and picture sync so badly that I just went ahead and upgraded to 12.04.
And now I DO NOT DARE trying the AMD drivers- maybe I’ll just buy a cheap pair of analog speakers and use this instead!
BTW, the basic video works beautifully on my 24″ HDMI monitor at 1920×1080!
Addendum -
I’ll give this kernel radeon.audio=1 a try, when I get around to modifying the grub2.
And let you know.
AMD Athlon(tm) II 160u Processor
Graphics: Gallium 0.4 on AMD RS880