CJDamaster,
Passthrough is working as it's designed. It means sending the audio to the receiver without any processing what so ever. It lets the receiver do the work. Since XBMC isn't doing any sound processing in that case, the volume control can't work. Very useful to let the receiver do the work of decoding AC3 and DTS streams, especially as the receiver is generally better at it, plus a bit easier on the PC as it doesn't have to decode the audio stream.
If you want to get fancy, if you are using HDMI, you could look into the
Pulse-Eight USB-CEC adapter. It would let you control a bunch of stuff directly from XBMC.
There is a
dual audio patch. There is plenty of info on the forums that is uncovered with the search button.
Ciao.