Well after browsing the net for 20 hours or so I still have not been able to determine what exactly I need to get surround sound in different situations.
Currently I have a Samsung LN-T4061F which does indeed have optical out. Some people claim that this output, regardless of the source, outputs a meager 2.1 stereo.
I have a blu ray drive installed on my PC
My PC has a 9600 GT overclocked, 4gb of ram and a 3ghz dual core so I can play blu-ray directly from it.
I also have a 360 with HDMI out and HDMI composite cables.
My question is: How can I set up surround sound with blu ray for cheap.
Things I've been considering:
Option 1:
Buying a 1.3 HDMI cable connecting my computer to my TV. ( video only )
Buying a bgears :confused:b-enspirer or an auzentech x-plosion and connecting the optical cable to the TV.
Buying Z-5500 speakers and connecting audio directly from the computer to the speakers.
Problems:
Cost is a factor, my family doesn't buy crap so I have to buy everything myself. I don't have that much money but I can save and wait if needed.
If my TV's optical out does not support 5.1 out then I won't be able to get surround sound for games which is a big concern for me.
Option 2:
Connect my 360 to my vista computer via cat6 cable for smooth streaming. Would I get audio as well? or would I have to have a seperate connector for that as well. My understanding is that the 360 renders it and outputs sound as well. This option is great since I know I have optical out but I'm not sure if it is 5.1. If it is with Z-5500s I can connect them directly to the TV which would be pretty cheap as well.

I just ordered "5.1 Game Console Adapter Convert Rca Plugs To A Single 1/8" as a temporary solution since I may have to wait a while before buying more things . This should hopefully get me 5.1 or at least something decent while I wait for some of my things to sell.

Also: I know that Z-5500s probably aren't up to par with what you have but keep in mind that I don't have, or want to spend tons of money on something that is not that much better. I am always trying to get the best value and I think the Z-5500s would probably give me plenty of quality for the money.

I heard about hacking the 360 component cables for optical output but I'm not knowledgeable of that subject and I'd prefer a more elegant approach.

I'd like to spend as little money as possible while gaining 5.1 surround sound in games/blu ray with good quality. Thanks, I can't comprehend all of the information online at once and I'd rather not take my chances hoping that I'll get 5.1. BTW: I currently have a 5300e that I picked up for 45 dollars on black friday. A receiver is not out of the question if it is cost effective but I don't mind switching connectors around and would rather save as much money as possible. I have 3 HDMI ports and an optical in and out on my TV. I hope this makes sense. :confused:
Thanks and I apologize for any mistakes, it's 1AM here.

Your TV is not going to provide 5.1 sound, so running sound to it for that purpose is pointless.

You will either need a receiver or to send 5.1 analog/digital from the computer to a 5.1 speaker system designed to handle such a connection. I do not know if the Logitech qualifies.

Thanks - it seems like I need a receiver.
Another question I have is that would be it wise to wait till black friday to get a receiver? I only need 5.1 surround sound and even when I upgrade my speakers I do not plan to get 7.1.
It seems some features I need are optical out + in and at least 2 HDMI ports
Onkyo-TX-SR505S 7.1 looks good but is a bit overkill for a 5.1 setup I think...Still it is cheap but I'd like further input from guys who've researched more than I have.

Well, if you want blu-rays advanced sound, you will need a Onkyo 605 at minimum. If you can't afford a $400 receiver, perhaps you should just wait a while.

Is there any serious contenders for the Z5500 that I should look into? The sale just ended on them. Also I would be using a sound card probably a b-enspirer or an auzentech x-plosion to transmit the signal so regardless of whether I get the receiver the source will not be DTS HD unfortunately. It seems like to do the things I want I'll have to wait 6 months till black friday for a cheaper price and new receivers. However I will be buying speakers before then and since the logitech Z-5500 sale ended on amazon I need some advice. Since the questions regarded setup have been answered I'll post in the other section.
Thank you very much for your help.

Resiroth,

Here`s how I achieved 7.1 in my HTPC with an Xplosion, on the cheap and by buying parts over time:

I upgraded the OPamps in the Xplosion - well worth it!
I use my z5500`s as Center/Sub, Side Right/Side Left and Rear Right/Rear Left(analogue).
I use my existing stereo Amp and my 5 foot floor standers for Front Right/Front Left(analogue).

For my outlay,it sounds great to me. For DTS encoded DVD`s, I just switch to Digital on the Logitech control pod and away I go!

I'm thinking about getting Z-5500s. The problem is that they just went off their sale. Hopefully there will be another one soon. I am leaning towards the b-enspirer since it has vista drivers and all and the newer oxygen audio chip. I hate waiting but otherwise you always wish you waited for the sale.

You need to check Tiger Direct for those Z-5500's. They are under $200 after the $40 rebate and only slightly over before the rebate. Click here... (http://www.tigerdirect.com/applications/searchtools/item-details.asp?EdpNo=1068250&Sku=L23-6334&SRCCODE=PRICEGRABBER&CMP=OTC-PRICEGRABBER)

I have that B-Enspirer too. I've had it for a month now. I just filled out my RMA on Newegg for it night before last. It's a great sounding card but it doesn't decode any digital input. So I'm sending it back and using that money towards a Yamaha RX-V663.

I can understand why not being able to decode digital input is import for some people but I would be using it to send DD/DTS 5.1 over an optical out cable. This works right? If not what card does for the same price range? Also tiger direct is 220 with shipping from amazon. On their site it is 280 with rebate. Even if it's not with rebate it's still 240 which for some reason is more than their amazon price. I think I'm going to wait for the next sale since recently there has been quite a few.

The B-Enspirer can encode yes, it just can't decode. That link I sent you says $30 shipping. So they'd be $250, then you'd get $40 back. So $210 total price after your rebate. How are you coming up with $280? Are you outside of the US or something?

You can also get them shipped for $222 from Ritzcamera.com here (http://www.ritzcamera.com/webapp/wcs/stores/servlet/SearchView?storeId=10001&catalogId=10001&langId=-1&keyword=z-5500&x=0&y=0).

I live in solana beach California. Zip code 92075. Ritzcamera I've heard horrible things about - not sure if they're true but I'd rather be safe with 10 dollars extra. I have the money but I don't need the new speakers this instant. I am planning on waiting for the next sale since if one company has them on sale other companies drop their price. Tiger direct says 220 + 60 dollars shipping. I'll buy the b-enspirer right now since I'm pretty sure I need that. The speakers I'll wait for. I hear they are being discontinued and if there is no more sales then I can get the new one which will probably be better. If I can get a sale then the Z-5500 will last me for a while. Black friday has amazing deals but I'm not sure if the Z-5500s will last that long. Also waiting 6 months to watch movies in 5.1 is going to be extremely annoying. Hopefully in the next month there will be a sale.

Also, is there no real viable alternative to Logitech Z-5500? I hear the klipsch(sp?) promedia tend to break quickly.