Supermartyoh said:

I know this and the Gaming Plus edition has 5.1 surround recording through digital audio (SPDIF), but can it also encode 5.1 from the HDMI audio stream?

Technically, no Hauppauge HD PVR version can encode 5.1 audio, but if passed a Dolby Digital 5.1 stream via SPDIF or HDMI, yes those versions can capture it. (No DTS or PCM.)

Also, if it only downfolds and encodes stereo from HDMI audio, how is the quality and bitrate? Does it encode the audio on the m2ts's as DD, PCM, or AAC?

All stereo encoding is done as AAC only.

I am aware there are video capture cards with 5.1 audio capture that go on the PCI slots, but most are for PCIx16 and my desktop is PCIx8 (I believe).

I don't think any PCIe capture cards require 16 lanes. Even the DeckLink 4K Extreme 12G that captures 4K@60 is 8-lane Gen 2.

But your mobo only has x1 slots. You could buy the Decklink Mini Recorder (1-lane card with support for 8-channel uncompressed PCM via HDMI -- only up to 1080i though).