So I've got my PS3 hooked up to my TV via HDMI (which is a digital signal), and from my TV's optical out (which is ALSO a digital signal) I am sending it my Kenwood receiver. Is there a reason why it is not detecting the Dolby Digital UNLESS I connect my PS3 directly into the receiver with the optical wire? ANY HELP IS APPRECIATED!

The optical out on most TVs is out from the TV's tuner. They do not pass through the Dolby Digital signal from inputs.

Your best bet is to hook up your PS3 to the TV via HDMI, and connect the PS3 directly to the receiver via optical.

That's the answer. Stereo only from the optical out on the tv.:)

Hopefully Samsung will realize what customers want and provide a TV that will pass-through the HDMI audio if it's Dolby or DTS 5.1.