I'm curious, you say small dropouts and you listed VLC as the playback software, any chance that the interaction between VLC and new OSX could be the root of the issue? Maybe VLC had the weird dropout and it's not related to your mac system at all?
Sean listed VLC, I used Audacity as my benchtest program because it would seamlessly repeat audio, but I thought about the software interaction as well. Tried Songbird, Quicktime, Izotope's RX, and Audacity with the same results. Actually, the same program on different OSX versions worked (10.6 was ok), and the optical out never failed.
I spent some time looking over the differences and it was the operating system that was doing me in on the small dropout front (I also had general audio disruption which they could replicate on their end, thats a different problem though from the small dropouts). Now, an interesting thing I learned tonight was that while 10.5.8 (which I still have on one machine) should automatically do full speed mode upon plugging it in, mine doesn't seem to. Holding input1 while plugging it in seems to resolve the dropouts. I'd have to test it for a while to see if that's really true or not, but food for though.
Computer audio can be a real bitch sometimes...
Then off topic, how come you chose VLC. I do like that program and in fact talked the college where I work into installing it on all classroom computers since it will play ANY video no matter how old it is.
Bingo, thats the only reason I have it installed (in general).
I have been using mine with the 15dB pads on all the time now after having some issues with clipping onstage mics with really loud bands. anyone else notice the clipping issue?
Makes sense, I'm doing the same thing too. The max input on the 722 for mic in is like +10dbu, while the usbpre2's
without pads is something like -10dbu and rated at +4dbu
with the pads (which most professional mics are capable of reaching
based on table 1). Now, the line-in rating is a whopping +28dbu (2 more then the 7 series).