The protection of the video path is a requirement to allow support of content protected formats.
If you do not like that, take it up with the source not the messenger. Microsoft did not steer Hollywood into protected video paths. Chances are XP will not support HD from most vendors due to licensing requirements of a secure video path which XP does not give.
Note also the website linked
http://www.cs.auckland.ac.nz/~pgut001/pubs/vista_cost.html
Has loads of bull on it and thats me just reading the first section.
SPDIF is not the highest audio connections, it only has a data rate of 1.2gbits which is not enough for most hd multichannel audio. In that SACD and DVD-A simply do not fit on spdif and have never worked on it from any player ever. The choice to send a limited LPCM signal down spdif is upto the player and Vista does not stop that. Also SACD has NEVER supported PC, it lacks any physical drive to read it and no software has been licensed decoders. Considering the "facts" on that website are just utterly wrong I wouldn't lay much trust in the guy having a clue about what he is saying. However I will continue to read it some other day to see if the guy has a single valid or correct point.