This article details information regarding common audio connections.
Optical (Toslink)
A digital, fiber optic connection used to send digital audio signals from a source component to an audio processor, such as an A/V receiver. Impervious to common household magnetic and RF interference, it offers excellent speed and bandwidth, though cables are usually more costly that coaxial cables that are used for the same purpose. In terms of performance, there is little if any discernible difference in sound between the two.
Coaxial (SPDIF Coax)
A digital interface format invented by Sony and Philips (hence, SPDIF) used to send digital audio signals from a source component to an audio processor such as an A/V receiver. Coaxial refers to the cable design and not the connection technology, which unfortunately results in some confusion with other video and networking cables that use a coaxial design. For digital audio applications, coax cables are more economical than optical and just as capable, but can be affected by electrical interference.
HDMI (High Definition Multimedia Interface)
A digital connection that can carry both digital video and audio signals over a single cable. HDMI can support up to eight channels of audio at multiple sampling rates, and cables can extend for as long as 15 meters. HDMI is used primarily as a video connection, but the specification allows for audio, video and control data, and future products will incorporate these functions.
RF Coax
This is the most basic connection and can be used to connect a VCR to a TV or a TV Box to a VCR and/or TV. If offers the lowest audio and video quality.
Coaxial (F-Connector, RF Coax) 
A coaxial interconnect will give you very low audio quality. It can only provide mono (a single audio signal for left and right speakers) sound with no ability to provide stereo (separate audio signals for left and right speakers) sound. It also transmits an analog signal, which is susceptible to electromagnetic interference and noise.
A/V Jacks
The most common home theater connection. Notice the sound and picture are broken out into three separate cables. This design improves audio/video quality.
S-Video A/V Jacks 
The S-Video jack replaced the yellow video cable to increase video quality. The cable is actually two-in-one, sending the color and gray scale in separate cables. This was used for Laser Disc and early DVD.
Component A/V Jacks
The Component jack split signal into gray scale (green jack), red and blue. This provided the sharpest picture for DVD and more than twice the picture quality than that for HDTV. It is the top-of-the-line for analog connections.
Analog Audio (RCA) - Two Speakers
If you want sound to travel from one source to your stereo, this is the simplest way to do it. The standard red and white RCA connection separates the left audio (white) and the right audio (red) for stereo recordings. All television broadcasts have been in stereo for almost 20 years. A stereo recording means it was meant to play on two speakers.
RCA audio interconnects are very common and seen on most consumer audio/video electronics. The RCA interconnect carries analog audio for only a single channel. This single channel limitation is why it is common to see dual RCA interconnects for left and right channels. The single channel limitation is also why RCA interconnects are not used for surround sound since one interconnect per channel would be required.
Subwoofer (RCA)
The “.1” in 5.1 or 7.1 Surround Sound incorporates the subwoofer signal. Subwoofers use the common RCA interconnects to pass their low frequency bass sounds. The RCA interconnect is perfect for subwoofers since RCA interconnects can only carry a single channel.
Digital (Compressed) - Five Speakers
You’ll only need to choose one or the other for each piece of equipment. Both feature the same benefit. The optical and coax connections send a truly digital signal to your stereo (receiver).
The actual difference in sound quality over the red and white RCA cables is the ability to send audio to five speakers (not just two). For DVD and HDTV broadcasts, you’ll want to use this connection.