DVDs with clipped audio
 

I have noticed that many music DVD when ripped - with the 2ch audio selected - have clipped audio. The signal max is often well below 0db but the waveform is easy to see that it is clipped (flat lined).

Does anyone know why is this the case and is there anything that can be done about it by way of background settings in codecs or filters?

BTW : To get around this clipping issue, I rip with either DVDFab or Shrink, selecting only the 6ch audio (which I find is never clipped), load all 6 audio channels into editing software and down mix to stereo, involving many steps and taking a lot of time.

When you say "rip", are you including some secondary re-encoding process in there? For example, the incorrectly used phrase of "ripping to iPhone" or some such mixture of not just extraction from the disc, but also subsequent steps that reencode the audio/video to some new format? A straight rip would be either an ISO file, or a folder full of VOB/IFO/BUP files.

Audio levels are often clipped in the music world, because they like cooked audio.

The thing is this: Does it actually sound bad, or are the levels just metering badly? There is a difference!

Ripped by DFDFab or DVD Shrink -with 2ch audio selected - then directly imported onto Canopus Edius timeline.
The sound is OK* but the audio waveform looks bad on the timeline - sections are flat-lined.
*This can be deceptive - a touch of added distortion can add a bit of "edginess" to the sound, making it sound more exciting (like every guitarist knows).
I have read on the Canopus forum that there is a bit of headroom above 0dB before actual distortion takes place. Bit I don't know if this is true or not.
Does anyone know the facts?

This is correct: there is a bit of headroom above 0dB before actual distortion takes place. :)

The keyword is "bit". It's only a fractional amount of space before it starts to be audibly distorted.
Technically speaking, inaudible distortion likely starts at 0dB.