Questions about the best sound card & speakers for my setup...

Greetings,
I am building another high-end dekstop PC. I'm looking for a NICE sound card and a set of 7.1 speakers. I currently have a X-Fi Fatalty FPS card, but was thinking of selling it and getting an X-Fi Prelude since it has optical out. I was also thinking about a set of Gigaworks S750 speakers, until I realized they don't have optical in. I was hoping someone more familiar with PC Audio could help me out. I have read several things (including the sticky/float post) about digital audio, but I still have a few questions.
1. What are the advantages/disadvantages of Digital Audio? (I have heard it sounds worse?!)
2. What is the best way to encode/decode audio? (Possibly keep it all Digital and not decode at all?)
3. Is EAX, Alchemy, CMSS compatible with Digital?
4. Why would Creative's top of the line S750 speakers not have Digital In?
I will be running Windows Vista and using the PC to play a lot of Games (including EAX), listen to music (mostly MP3 and WMA), and watch DVDs (I want FULL surround sound support). I want to have the ability to CMSS upmix stuff also. Can someone recommend something for me...
-Thank you

Hi
try eye tv from elgato:
http://www.elgato.com/
Good Luck.

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