Very interesting thing just happened: I was just playing my iPod thru my PA using the XLS 2000, and the problems I have previously described have disappeared.... I had channel 2's pot control all the way down (which until now still allowed sound through) and noticed that the channel wasn't making amplifying the signal all of a sudden. Turned the pot up, and voila, it is seemingly working properly. I'm still going to try and exchange it.