Coaxial or Optical


I am just getting my new HT system together. It includes an Onkyo 676 (old Adcom seperates for Stereo), Pioneer Elite DV-37, and NHT 2.3A's and matching center and surrounds. Should I use coaxial or optical to connect the DVD to the receiver? Does it make a difference? How much do I need to spend that will make a difference? I am using an 8 year old Sony 32" XBR. For video, I only have S video, can I connect to the receiver first and then to the TV? Does this degrade the signal. I should have it up tomorrow. Any input will be really appreciated.
pablo1
I appreciate all the responses and will take your suggestions. Does it pay to spend for the more expensive connects? Thanks again.
There has been some controversy about optical vs. coax. I'll tell you up front that I am no expert. The Company Cable recommends using optical *instead* of coax for the MSB Link DAC D/A. So does Stan Warren (I believe he is the "S" in PS Audio); I spoke with him several weeks ago and he seems very knowledgeable. That at least indicates that the last word hasn't yet been said about which is superior. It is even possible that optical is best for some components while coax is better for others. I'll second Avguygeorge in recommending that you try both. What I can say is that I am currently auditioning the AIWA changer/MSB Link DAC combo using optical to connect them and it sounds quite good. Unfortunately the AIWA does not also have a coax out so I can't compare.
Oh no ... I think you're opening the "thread from hell" asking about how much to spend on interconnects, Pablo. With no intent to sound rude, I really suggest you search out the archives here and read up. At the very least, you'll get a feeling for the multitude of views on this subject, even if you never do quite get an answer. Some of it does make for interesting reading ... at least the first couple hundred times.
To answer your question about spending more for interconnects, that depends. I wish there were an easy answer but $$$ does not necessary equate to quality. To give an example. Not too long ago I auditioned 9 or 10 power cords ranging in price from $70 - $600. The $290 Custom Power Cord Model 11 bested them all when used on my power amp. On digital sources the $600 Marigo Ultra Series II was the king of those auditioned. But the $70 Stealth HAC came in third, well ahead of the $500 JPS Labs. To make things even more confusing, someone else will likely get different results on their equipment. So, the answer to your question will have to come from you. Many manufacturers have 30-day money back garrauntees. You can also borrow cables from the The Cable Company's Library. Decide what your budget is, make a list of several cables you are interested in, and start auditioning. My recommendation is that you not try to audition more than three cables in any given three or four week period.
About 6 years ago I belonged to the "bits is bits" camp, and thought that interconnects couldn't possible matter. One weekend I brought home a Wadia dac from my dealer to try. He loaned me a $200 piece of coax to use, which I politely accepted without laughing.

When I hooked up the dac, I used Toslink from my Sony X77 CD player out of convenience. I already had a Toslink cable plugged in and the back of the player was hard to reach.

I was unimpressed with the dac. Before I brought it back, I decided to try the expensive coax just to appease my dealer.

The difference was unbelievable. The soundstage opened up, low level detail appeared, and I couldn't stop listening!

Moral of the story: I avoid Toslink whenever possible.