Can someone give some practical examples of how this can be useful? I feel like this might be huge, but I am not fully grasping it yet.
In short, AES or SPDIF was previously very limited in routing via blocks. Now, you can get these sources on to the grid via your choice of inputs. So, for example, you might process guitar with Inputs 1 and 2, and then bring a digital signal onto the grid via Input 3 or 4. Another desirable application would be using OUT 2 and IN 2 as a digital send and return. (Set SPDIF/AES Source to OUT 2, Set In 2 source to Digital).
The important thing to remember is that you have one digital input source. It must be set to your choice of AES, SPDIF or USB 5/6. Once you designate this source, any of the four input blocks can be set to use that source. You can even assign it to more than one of them at the same time. Of course, you can also select Analog for any input to have it use the associated jacks. The first time Cliff explained it to me, I made a sketch in my notebook. Here's that sketch dressed up a bit:
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