As to cables, and this is what I have read and researched (but there are definately two+ families of thought). I actually prefer the toslink approach as it keeps the transfer of data as a light form. The RCA/SPDIF is an electronic signal and (from what I have read) more suceptable to environmental factors.
With toslink, I am of the opinion that one does not need to spend a large amount of money on these cables, that the connectors are actually more important than the cable itself (secure, prevent light leakage, etc). Obviously, since conveying the signal as light, the key is to not allow for a kink in the cabling.
Over the years, I have had many more problems with RCA/SPDIF cables failing (two times) than toslink cables (I have never had one fail).
I have also found no difference as to the cost of the cable and its performance (I have a pretty revealing system and can certainly tell a notable difference with difference ICs and SCs).
With toslink, I am of the opinion that one does not need to spend a large amount of money on these cables, that the connectors are actually more important than the cable itself (secure, prevent light leakage, etc). Obviously, since conveying the signal as light, the key is to not allow for a kink in the cabling.
Over the years, I have had many more problems with RCA/SPDIF cables failing (two times) than toslink cables (I have never had one fail).
I have also found no difference as to the cost of the cable and its performance (I have a pretty revealing system and can certainly tell a notable difference with difference ICs and SCs).