Why do digital cables sound different?

Allow me to defend my position with this observation from personal experience: switching between tape and monitor when dubbing to a cassette deck, one might be hard-pressed to hear much difference. One would be very wrong.

Playing around with these in various configs and switching inputs back and forth (both blind and active, I used some fellow audiophile friends) - there is NO difference whatsoever between ANY of these cables.

This matches my experience. I maintain that properly engineered and matched equipment should not give a hoot about cabling - as long as it is adequate and you don't have a ground loop, RF/EM problem or contact problem. I suspect that the great differences reported stem from running equipment at the limits of its ability - amps that are already clipping and loads that are mismatched to begin with....situations where the slightest difference might influence the sound enough to be audible. Just two cents...and I admit I could be completely wrong.

Sometimes there is much more involved than meets the ear while doing quick a/b comparisons in wire. Geometry of the wire, conductor material and dielectric material need to find their relaxed neutral state of mind once they have been disturbed and reattached again. This I found to be true of cables that have been playing in the same position in the same system for a year or more. They need to settle back which may take a 1/2 hour or more. Tom

I`ve done a test like Osgorth did, and with optical AT&T as a reference.(A-B-C test) First; optical outplayed any "high-end" (high price) coax, actually no match. Even if we could observe some minor differences between the coaxes, they was totally outplayed by the clean open sound from/through the optical cable.
Tryed out some DIY`s too, air-insulated coax and stuff, but none came close to the AT&T digital. Until I made up a coax of my reference IC; the TV-coax Vivanco KX-710. And for some reason this coax just does it all right. Now we were up in the same league as the optical, and after some switching we could observe that the Vivanco-coax was definetly a bit cleaner in both ends, much like the same way it outperforms all other IC`s, then in twin configuration.

Even if I have my thoughts about why they sound different I woun`t try to come up with some answer/guessing. But one thing is clear; there`s a lot more to soundreproduction then what those "theory-heads" comes up with :P

Wire properties can certainly affect digital pulse characteristics. But, up to the point where a data "one" can be misinterpreted as a "zero" pulse characteristics don't affect the information which goes into the D/A converter.
So I don't find it "mysterious" at all that various cables sound the same. The mystery is why some folk think they sound different.