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EDIT: An equally big question is, can it sample Aux-in while we play sound
from software, or is sampling of aux-in only possible when aux-in is being played out?

When this discussion first came up (and the FAQ entry was written), my understanding was "no". I could be wrong about it, there are a lot of complexities surrounding this.

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The cs4231a chip can sample from aux-in --> that's how the aux-in visuals are done.
Whether or not it can sample at sufficient quality for playback is another matter.

My understanding (again, a vague one) was that the sampling would max out at some low frequency, such as 7k or something. I don't remember the exact number.
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Tony Fabris