So... How do opticals work?

Because the TV's optical output only passes what comes into the TV via it's built-in tuner (OTA).

And even if the TV could pass that which comes into it from your sat box, it would only pass a 2-channel signal, as you say that your sat box is connected to the TV via "composite" (I presume you mean by a L/R analog connection). You need to connect your sat box directly to the receiver via its optical output, not via a "composite" L/R analog connection, in order to enjoy true digital 5.1 surround sound from those channels that provide it.

If you want to use the receiver as a "switcher", you can run the S-video connection from the sat box, through the receiver, then out to the TV. Why are you using an S-video connection, btw? Does your sat box and/or TV not have component video outputs?

It doesn't have to be an HD box to have a digital audio output or component video connections. Are you sure it doesn't have either an optical audio outout or a digi coax audio output? You may want to check with your satellite provider about getting a new, more capable box.




No. As I said, and as you discovered, the TV will not "pass-thru" audio. So you need to, at the very least, connect your sat box's audio output directly to your receiver. You should like-wise connect the DVD player's audio directly to the receiver, preferably via a digital connection.

I don't know what you are using to connect the DVD player's video (S-video, component?), but if it is component, there is a very good chance that your receiver will "up-convert" the S-video connection of your sat box to component video so that you can use a single component video connection to your TV, connect both your sat box's and DVD player's video connections to your receiver, and use the receiver as a "switcher".

If you must use a L/R analog connection for your sat box's audio, then make certain that you are applying Dolby ProLogic II or some other DSP in order to get pseudo-5.1 sound from your sat box.