"I'm fairly new to this stuff and can't really grasp the idea of Digital Input Assignment. Can anyone please help by explaining the concept ?"
In math, "A" can be anything you want it to be. And if your parameters change, you can rename "A" to be anything you want it to be or "input assignment."
Same thing with renaming receiver inputs. You have input 1 through 6 and they are given names of convenience or naming standards if you will. Input "1", although labeled CBL/SAT, one can run a CD or Blu-ray player into input "1" as input "1" is really nothing more than an input with a convenient name attached.
As to "Digital Input Assignment", one is assigning what the type of digital input is going be, HDMI, Optical or Coax and which plug to use such as Opt 1 or Opt 2. If this is not done, the receiver won't know where to look for the signal you're wanting used via internal switching.
Hope the above ramblings help clarify the question for you.