Optical will work fine for Dolby Digital 5.1 and DTS 5.1
It will not, however, carry HD Audio like TrueHD or DTS Master Audio, or uncompressed PCM.
If you use these codecs, then you will loose them. However, the regular DD or DTS on Blu-Ray are less compressed than the DVD equivalent, and will sound almost identical on all bu the best audio systems.
Get an optical cable for the $4 they are at Monoprice.com and try it. If you like it, then stick with it.