In reply to:
More like electrical to optical and optical to electrical. It's all digital.
Yes. From what I understand, it's a little like morse code. Electrically, in a digital coax cable, this means that sending an electron down the pipe means "1" while absenceof an electron means "0". This, I believe, is an over simplification, but essentially, that is how it works. With the Toslink, essentially you have "light on" equals "1" while "light off" equals "0".
Both translate the source code, but do so in a perfect way - whereas with analog to digital, and vice-versa, there are always extrapolations or abbreviations that must be made, creating errors that degrade the sound.
In the end, if a toslink and a digital cable successfully carry the little "1's" and "0's" to the DAC, then the cable has perfectly done its job. Then, its up to the DAC to perform is math and figure what the sound should be.
If distance were not an issue, I would bet the farm on both sounding identical. In fact, some of my "digital" connections are being made with the el-cheapo spaghetti wire that came with my components. I figure if ther are sending the signal, all's well. I have not had any drop-outs or what I would diagnose as digital noise/static since hooking up the digital connections this way. (Saved some green, too)
