Digital Audio Out Audiophile Newbie pt. 3

It really depends in what context we are talking about to
answer your questions.

IMHO:

"What do you guys think of digital audio out
(optical/coax)?" I think very highly of it.

"Do you find that it diminishes audio quality? No

"Given only the choice between digital optical, and
digital coax, which would you choose?" Coax

I guess I'm talking about home-theater disc-players that have digital out. Like Oppo or Sony.

It is system dependent. In some cases optical (Toslink) can be better. Coax should be either very short (less then 1ft) or at least 1.5m