Dave,
There are some errors in the information above that need to be corrected. I suspect your comments concern the original Dti Pro, and not the Dti Pro 32, which is the subject of the thread.
The Dti Pro 32 retailed for $1595.00 not $700, and it is a much more sophisticated beast than the original Pro. It is also capable of 16,18, 20,22 and 24 bit resolution, not just up to 20 bit, as you mentioned.
Also, the resolution settings that you list are incorrect. The correct settings are as follows:
HDCD off off off
16 bit off off on
18 bit off on off
20 bit off on on
22 bit on off off
24 bit on off on
none on on off
The method of toggling the LED's is as you described.
This unit competes favorably with the Genesis Digital Lens, but works best in an all AA system using the proprietary I2s bus between DDS Pro Transport, Dti Pro32 and DDE V3.0 Dac. The V3.0 is HDCD capable and the Pro32 can pass HDCD.
Here's a good article that explains more http://www.hometheaterhifi.com/volume_3_3/v3n3j.html
Rooze