I can confirm rolling back to driver 4.2.4.4 fixes the problem.

I have had this problem also, two times. My computer is mac (if it matters). I had my headphones on when the HD-edit/HD500 started SQUEELING LOUD!! Not nice!

+1 on XLR output also having this very high level squeal... It is not a pc sleep issue (I use a laptop live with XLR to PA, USB for backing tracks into HD500)...  Just started with new firmware (from memory)...

I've had it happen to me before too.  Plain and simple, my computer doesn't go into sleep mode at all.  I hate sleep mode.  I was a computer guy for a living for almost a decade and know all the headaches that can cause.  Also, my laptop which is running a Windows 7 Home Premium doesn't have any hubs.  Last time it happened I wasn't editing a patch or anything; I was just playing a song.  I had HD500 Edit, Firefox, and Mixcraft open.  I had edited a patch earlier in Edit and was playing along with a Youtube video to hear if the tone was pretty close to the song I was trying to play.  Mixcraft wasn't recording as I wanted another trial run or two in before I recorded myself.  None the less, it was set to record via USB from my 500.  I was in the midst of the second chorus and was reading the chords in a seperate Firefox tab when all of sudden I got the squeal that other people are talking about.

As far as connections with my HD500 go, I had the power adapter going straight into an wall outlet (no power strip), the USB cable plugged directly into my laptop, a high quality 6 foot cable plugged into a stock Epiphone Dot Studio with dual humbuckers set in the middle position, and a set of Sony MDR-V6 headphones.  While I did have HD500 Edit open, it had only pulled the patches from my 500.  It hadn't been actually editing them and the patch was saved to my 500 as well as it's a fairly common one that I use quite often.. 

I'm running the latest and greatest drivers, firmware, and version of Edit although this had happened in the past a couple of times with 1.3 firmware but I can't recall the specifics with those. 

The patch I was using a had one amp (Tweed B-man Nrm).  I had a Screamer sitting in front of it but it was turned off.  Behind the amp I had two seperate signal chains.  One is active at a time.  One has a digital delay followed by hall reverb and was the one I was playing through at the time.  The other has the analog chorus followed by plate reverb and these were turned off.  There is nothing after the mixer.  All effects are controlled by FS1.  The Screamer, analog chorus, and plate reverb will be on or the digital delay and hall reverb on with FS1 controlling them all.

I know this has been a rather long reply but since we've got someone actually from Line6 on here I thought I would provide as much info as possible on what was going on with my system the last time it happened to me.

I've only had it happen when using headphones but to be fair, that's the only output I ever use.  Well, that and USB.  Also, at least for me, it isn't a problem with the new driver as I had it happen a few times with the older one too.

hi chaps, sounds like a real annoying issue.  can't say I use USB that much lately so haven't personally had it happen, but I look after my ears so wouldn't like it!!!

did you chaps notice a new driver was released 3 days ago?  It doesn't specifically say it fixes this bug, but I know that not all lesser known bugs that are fixed are listed in a release note... Not saying this issue isn't important, but if not many users had reported it when they were finishing off the new driver release it might not have made it into the release notes... worth a try: v4.2.5.1 released 20th December 2011.

Cheers

Rowbi