This paper discusses a multirate filterbank-based extended infomax algorithm for real-world signal separation, i.e., convolved mixtures separation. Since convolution in the time domain corresponds to instantaneous mixing in the frequency domain, polyphase subband projection naturally becomes an efficient alternative to the Fourier transform based frequency domain approach. The online implementation proposed is featured by a simultaneous inverse channel identification in the frequency domain and signal filtering in the time domain. It is shown that an over-representation structure reduces aliasing between different bands and results in more accurate inverse channel estimates. Therefore, it provides better performance than the Fourier transform based structure in the measures of both separation and distortion. The performance limitation of the method is also evaluated in terms of the Wiener solution.