Originally Posted by thewitt
I don't know what that is. It has coax in (Cable input).
Well, here's your opportunity to learn...http://www.apple.com/appletv/specs.html
Many devices have a digital audio output that is either optical or copper wire. The optical port, as on the Apple TV 2, is called optical, while the copper wire version is called "coax". The coax port uses an RCA cable, although it has to be an RCA cable that is of good enough quality to handle the digital signal. Converting between optical and coax is relatively easy because it really is the same signal, just in a different form.
The Apple TV 2 has four ports - HDMI, USB, optical digital and network along with power. The HDMI can be converted to DVI and used on your TV *if* (!) your TV is also HDCP capable. HDCP is the copy protection mechanism that all standard consumer HDMI outputs must use for commercial output. No HDCP = no picture. Many DVI-only TVs were not HDCP compatible. There are no commercially available HDMI to component adapters.
If your TV has no digital audio input, then you have to convert the optical digital audio coming out of the Apple TV 2 to stereo analog audio. The easiest way is with a cheap A/V receiver and then plug that output into your TV (or just add speakers to the A/V receiver).
However, you're now adding cost. At this point I'd say you really have two choices - 1) Return the Apple 2 TV and explain why you are returning it or 2) Get a new TV that has an HDMI port.
This is just another example of why the push to make things all-HDMI is occurring way too soon. I suspect the reason for all-HDMI on the Apple TV 2 was also to minimize size but there are still a lot of people who will find their TV is not compatible with the Apple TV 2 because of this poor design.