I've seen one poster who claims the AAC quality was atrocious for him, while most people seem fine with it. Up to 384kbps can be selected. I'm not an audio guy so I can't offer any opinion, but you can grab a sample to listen for yourself here.

Yes that is the Mini Recorder. It sends uncompressed 4:2:2 video over the PCIe bus, so your computer is tasked with doing the encoding unlike the HD PVR2 or your AGPTek box.

It is possible to have a CPU do compression to H.264 using x264vfw on-the-fly, but I suspect yours isn't fast enough. If you use a speedy enough storage hard drive (not your Windows drive) or a large SSD you could capture lossless and then compress to H.264 or anything else at your leisure, with better quality for a given bitrate than is possible with any realtime solution. This is what I do, so it's what I'm most familiar with.

Unless I missed it, you haven't mentioned what your video sources are going to be. This is critical to deciding on the most appropriate solution, because if you're capturing from something like a cable box then 5.1 PCM does you no good. Most cable boxes will output only stereo if the HDMI handshake tells them that DD 5.1 isn't supported.

The Mini Recorder can actually be forced to record DD 5.1 bitstreams from a PS3 into a WAV pulse file that can be recovered back to the original format, but that's because the PS3 can be forced to output any format even if the device it's hooked up to says it can't use it and the Mini Recorder doesn't detect and mute bitstreams like most PCM HDMI capture cards. None of that helps a cable recording, where the box can't be forced to do anything.