Note to James T: much of what I'm about to say has already been said in emails a while back - my apologies for boring you with it again, but I think it might be pertinent, and I'd like to hear Shane's opinion if he has a moment....
There are a number of different ways one could think about for providing headphone output. The ideal, I guess, would be to include not only a headphone jack but also Dolby Headphone processing ability, but this would definitely need a more powerful DSP. Installing a headphone jack with circuitry behind it to drive headphones nicely might also be a significant hardware upgrade.
But, if Mr Parfit happens to be around, I'd be interested to know 1) how complicated and expensive it would be to be able to provide a stereo downmix of a digital source at the Tape or VCR outputs, 2) how much more difficult and expensive it would be to do that at the same time as producing multi-speaker output, and 3) if there's a better way of listening through 'phones with present hardware that I haven't thought of.
I'm sure that, like me, most serious headphone listeners already possess an external headphone amplifier. If I were listening only to analogue sources then that would be easy - just plug the headphone amp into the Tape or VCR outputs, and whatever the source is gets correctly routed there. But there's no output from the Tape or VCR outputs when the input is digital rather than analogue.
What I currently do is to plug the headphone amp into the L&R Front RCA outputs - which are available, because the processor-to-amp connection is balanced. But for that to work the processor has to be outputting a pure 2-channel stereo signal, which would affect anyone else in the room who wanted to listen to the output through speakers. Why would I be listening to headphones and someone else to speakers? Because I am partially deaf and I need it louder. But even if that weren't the case, it would still be annoying to have to reconfigure the processor to pure stereo every time you want to use 'phones.
For the SP1.7 to produce a stereo downmix signal at the Tape or VCR outputs would actually be useful for other things besides headphone listening. For example, here in the UK there's an increasingly popular device called a Sky+ Box which is a combined digital satellite TV set-top-box and hard-disk video recorder. When it records a program it directly records the original digital satellite bitstream, so that playback quality is literally identical to the live program. It also has a digital audio output (optical). Unsurprisingly the result of feeding the digital audio output through the SP1.7 sounds substantially superior to what the Sky+ box's own DACs can manage.
The problem comes when you want to archive a recorded program onto video tape (I have an old DVHS machine) or onto a DVD Recorder. What you'd like to be able to do then is use the Sky+ as a video source, but the SP1.7 as an analogue audio source. As it stands, this is rather fiddly for the reasons already outlined. (Here in the UK, we also have terrestrial digital TV broadcasts, and some terrestrial digital set-top-boxes also have digital audio outputs. Anybody using one of these with any kind of high quality video recorder - tape, DVD, or hard disk - would probably also like to be able to use the SP1.7 as an audio source).