How to connect Digital Optical Audio output iMac with Receiver Input

I have connected iMac with onkyo hts-3300 home theater system receiver through optical audio TosLink Cable.( http://www.amazon.com/Digital-Optical-Audio-TosLink-Cable/dp/B001ZU3G2I/ref=sr12?ie=UTF8&qid=1292865309&sr=8-2 ). Unfortunately there is no sound coming out from the Home theater system. I have verified the Receiver optical input is working fine by connecting with my TV optical audio digital out put and the it's working great. The only difference between TV and iMac is, on my TV, it has optical audio digital output and I can use this cable (http://www.amazon.com/Tripp-Lite-A102-02M-Digital-connectors/dp/B0002WPREU/ref=s r11?s=electronics&ie=UTF8&qid=1297320792&sr=1-1) to make it work. I can also verified my optical audio TosLink Cable working because I can see the red light coming out from the cable. So the only problem could be from iMac. I doubt I need to change the additional setting to configure iMac to use external optical audio setting instead of the buit in audio setting. Hoe can I able to do it? or my iMac(IMAC 21.5"/3.06/2X2GB/500GB/9400M-ITP
MB950ZP/A) doesn't support optical digital audio out put? I have follow this thread http://discussions.apple.com/thread.jspa?messageID=12769423&#12769423 and to my surprise which doesn't work out for me. I doubt that i need to change some setting, but when I got to setting>> sound I cannot change any setting. I was quite depressed aldy. Can someone answer my question as i m a newbie here. Thanks a lot

Thank you very much for your reply.
@Király : May i know how to Open Audio Midi Setup? Is this Audio Midi Setup is in the locatated in the Setting in Mac Snow Leapord OS? or how to locate this "Audio Midi Setup " in Mac enviroment. Is it possible to open this Audio Midi Setup in windows 7 enviroment also? I Just want to get the audio from my iMac in Hts-3300 onkyo home theatre. YOur help is much appreciated
@rkaufmann87 : Thank you very much for your sharing about this http://www.apple.com/airportexpress/ connection. for me what i understand is the digital audio output in airportexpress is the same as the audio out put in iMac in terms of details sepcs. So this airportexpress will only help you connect wirelessly to home theatre system, rather than waired connection. Other than that nothig much difference. So there is no point for me to spend extra bucks to attain the wireless connection. Unless the airportexpress have optical digital input, which i believe not. Correct me if I m worng, thanks

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Digital audio works fine as long as an application is actively generating audio, but when it is paused for a short while, I start static from my amplifier similar to what I hear if an optical cable is disconnected. I notice that there is no light coming out of the end of the optical cable. This was a problem in setup, as the absence of light caused me to think that the optical cable was damaged or not properly connected.
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I've also been having this problem with my Mac mini (2009 version). Static/crackle sound over digital connection when the audio has been idle for a short while.
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If I encounter any problems with using KSA with my setup, which includes running some multi-channel audio through Plex, I'll report back here.
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I'm out of optical inputs on my A/V receiver. How important is using the digital optical audio output, since there is no surround sound on the Apple TV?
Is using analog audio cables that bad, since the content on Apple TV is stereo to begin with?
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I don't think the issue will be surround sound since surround sound isn't supported by the tv, although as capaho points out there are some files floating around out there that appear to work with the tv, however as far as I know these are all test files and there isn't actually any content as such available.
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I have an idea for my MacBook Pro, but I'd like to know if it's feasible before I go and buy what I'd need to test my plan:
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Now, I'd like to know if I can have the Xbox's output go into the MacBook Pro's input, and route that audio signal through the MacBook Pro to either (a) the stereo output of the MacBook Pro, or (b) (preferred) my 5.1 decoder on my Griffin FireWave.
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I think this would be a great resource for many users, new & old. I think if enough people stir-up some noise "they" may actually pay attention to it. If you feel like this would be a good idea, please go to the Feedback link below and let Apple know.
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How to connect Digital Optical Audio output iMac with Receiver Input

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