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I using my kinda old home theatre (Philips hts9800w) for my xbox, and I am wondering if there is a big difference when it comes to analog and digital audio. It's kinda complicated, but if I am going to use digital sound, I need to convert it from optical to coax, but it's fine with my to do that. But will it be worth it, and will the digital sound be better for my gaming (cod, bioshock, battlefield 3)
 

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The analog audio might limit you to stereo only. That's what I found with my TV routed to my receiver via analog. Once I switched to optical I was able to get OTA surround. (My TV audio output choices are analog or optical.)


Look at your equipment manuals for details. Myself I am using optical out on my xbox.


Is it worth it? That's for you to decide. In mass effect I heard more audio detail in surround versus stereo only. Take a look at the xbox area on AVS. There are several audio related threads.
 
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