Kthomas,
Much (most?) of the problem is that the SPDIF interface doesn't carry timing information, certainly not bit-level timing info. The time base has to be recovered from the signal, and that is inherently problematic on a high frequency link. This is why digital cable quality is so much more important that you'd think it ought to be. It's also why quasi-proprietary interfaces like IIS were developed, and why there is curently so much interest in USB - they pass explicit timing information as well as the data, and so should minimize this particular problem.
Much (most?) of the problem is that the SPDIF interface doesn't carry timing information, certainly not bit-level timing info. The time base has to be recovered from the signal, and that is inherently problematic on a high frequency link. This is why digital cable quality is so much more important that you'd think it ought to be. It's also why quasi-proprietary interfaces like IIS were developed, and why there is curently so much interest in USB - they pass explicit timing information as well as the data, and so should minimize this particular problem.