Windows Vista Team Blog : Using S/PDIF to send audio from your PC

Have you ever wondered what S/PDIF is and how you can use it to connect up your Media Center PC to your audio equipment? If so read Nick White's post on the Windows Vista Team Blog where he explains all about S/PDIF, what it is and how content like 5.1 surround sound audio is transmitted over it

On a PC, the audio is stored and processed digitally until the final output stage when it is usually converted to an analog signal that directly feeds your speakers.  However, there may be times when you want to transmit the signal digitally to a different device that will be used to play the sound, such as a receiver.  In these cases, you may want to postpone converting the signal to an analog one, and instead transmit the signal digitally to avoid any degradation and additional noise that may occur when transmitting an analog signal.

Windows Vista Team Blog : Using S/PDIF to send audio from your PC