Interesting. I didn't know that. (Re: the Blu2 drive not handling SACDs.) I assumed it would since DAVE supports native DSD. I still don't exactly follow why, but I'll read up this about on the Blu2 thread if there is any info there. Thanks for the heads up.
DSD is an audio encoding format. SACD is more than just DSD64. It is a disc container format that actually has the DSD64 encrypted (much like a DVD). Actually there is also a compression layer after the DSD64 and before the encryption.
If you license the key, you are required to never retransmit the DSD unprotected. You can output as analog.... or, in rare cases (I can only think of one standalone transport actually), you can retransmit as digital with another protection scheme. There is no protected digital transport out of Blu2,
In many countries, bypassing this protection is prohibited by law, even aside from the contractual requirements with the key. Sony Playstation was "cracked", so in theory you can rip an SACD off of it... though, this is not legal in most developed countries, so by "can," I mean "technically able to", not "legally able to." That's why there are no SACD rippers unlike for redbook CDs.
Yes, the normal RedBook can be played off a hybrid SACD... the idea behind the marketing of SACD is to more a higher resolution version into the DSD64 layer and keep that protected.