Zest,
You have to differentiate between analog and digital outputs. A coaxial digital output uses a single RCA cable. An optical digital output uses a fiber-optic cable. Both are digital and sound identical. Both carry Dolby Digital/dts 5.1, etc. bitstreams as well as standard 2-channel digital CD stereo (PCM).
The digital outputs will generally sound superior to any analog outputs, assuming the D/A converters in your AV receiver are reasonably good quality.
And your DVD player may have a 6-channel analog RCA set for DVD-Audio and/or SACD, which you have to use for these two multichannel formats.
Regards,
