Choosing Between Coaxial and Optical
Since most CD/DVD players and satellite/cable boxes have both digital coaxial and digital optical connectors, which should you use? Practically speaking, there's no difference in sound quality between the two formats; both transfer the same number of digital bits. There are differences between the formats, however, which could sway your decision:
Optical cables are less susceptible to electrical interference; they're a good choice if you have a lot of "noisy" electrical devices or poorly shielded cables in the same area.
Coaxial cables are a bit more rugged and provide a more snug fit, thanks to the use of RCA jacks; use coaxial when you have to make tight bends around corners.
Coaxial cables are less expensive than optical cables.
Optical cables are slimmer than coaxial cables, which might matter if space is at a premium.
Optical cables have less signal loss, and are better for longer runs; if you have to run cable over 50 feet or so, definitely go with optical.
Bottom line, you're good to go with either type of cable. Optical cable is probably the better choice for most installations, however, due to the benefits of optical transmission—if you don't mind the extra cost. Otherwise, stick with digital coaxial, which works just fine over normal distances.