I have a setup right now that has my Verizon FiOS DVR connected to my HDTV with HDMI. I have the Samsung HDTV connected to my audio receiver's optical audio input. Shouldn't this be enough for my receiver to output in Dolby Digital?

It is only processing a stereo signal right now, which makes me question the receiver hardware. It is an old Kenwood receiver with no component/HDMI inputs. Would that make a difference even though the HDMI cable is only interacting with the HDTV, and the HDTV is outputting the optical audio signal?

Many displays will not relay/output a Dolby 5.1signal. It could be a display menu setting so review the manual, but a digital audio connection (RCA SPDIF or optical)directly from the DVR to your receiver should work.

Thanks. I looked up my HDTV on this forum (Samsung S5687W) and it turns out that is the case.