Connecting Z-5500 to MacBook with Optical Cable?

How's it going, first post here just need one question answered. I just got Logitech's Z-5500 for Christmas, and everything is set-up working great with just using the headphone jack. All speakers are working when in Stereo (x2) mode, but I would like to connect the system to my Macbook using the an optical cable since you get a cleaner, better quality of sound.
I don't know anything about optical cables or how to connect it to my Macbook. I know the optical side of the cord goes in the back of the control panel for the Z-5500's but where does the other side go into the Macbook? Do I just need one cable? Any detailed help with links will help. Thanks a lot.

Picked this up.
http://www.monoprice.com/products/product.asp?cid=102&cp_id=10229&cs_id=1022902&pid=1556&seq=1&format=2

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