Choosing cables to connect home audio can be a difficult decision, especially when people have multiple options available. Many pieces of equipment offer different inputs, such as HDMI, optical, digital composite and RCA--and those are for audio alone. While both HDMI and optical communicate digital audio, subtle differences exist between the two.
Optical cables use light to transmit the digital audio signal from the source device to the receiver. The receiver then translates that signal, which carries the information for all of the different speakers, into single streams of information that the speakers can produce as sound. Because of the digital nature, if the cord has a proper connection, the information communicated is always the same, and the sound information distributed to the speakers will also always be the same.
HDMI is a single cable, larger than an optical cable at its ends and slightly thicker, that is able to transmit both digital audio and High Definition video at once. Fewer receivers are able to translate HDMI information and, more often, they pass the information through to another source. Still, a modern HD ready receiver should be able to translate this signal, along with passing the video on to a television.
The quality difference between these two cables depends largely on the speaker set-up used. 5.1 speakers is the most standard household surround, if people use it at all. Optical cords are perfectly capable of distributing 5.1 surround at perfect digital translation, despite their use of light to distribute the information. Still, they are not fast enough to be able to distribute much more than that.
For high-definition sound, which is more than 5.1 speakers, usually 7.1, the cable has to transfer more data. The way that HDMI distributes information allows for formats like TrueHD and DTS-HD, which are both available through the Blu-ray format. If people have a high definition set-up, and have the extra speakers and a proper receiver, they would not technically be accessing all the information available to them if they use optical audio cables.
HDMI is completely lossless, so people won't be losing any audio, and the difference is clear. HDMI is the only cable currently with this status. Most audiophiles with a layman's budget will not have the equipment necessary to differentiate between quality on optical and HDMI, so it generally will come down to convenience of set-up regarding inputs and cables. Every home theatre has a slightly different need, but if money is no object, peopIe should go with HDMI.