You can save cash by using RCA for audio and HDMI for video. See here:
http://answers.yahoo.com/question/index?qid=20081016103949AA9YW0v
That way, you can use the standard multi-AV cables for audio, and the HDMI for video. Grab some 50 cent Female Stereo RCA > Male 3.5mm (or 1/4 inch) y cables, an inline 3.5mm volume control, and boom. For less than $5 you have audio out to headphones while maintaining a digital video display via HDMI. If you don't use an inline volume control or your headphones already have an inline control, swap the Male 3.5mm end with a female end.
If you want your whole TV's audio out to, well, output into the headphones, you can usually do the above but skip the inline volume.
Now if you want a digital source signal for audio (ie: you're insisting on using the toslink), you're looking into a DAC. That, or a full on DAC+Amp.
For a basic DAC, this might work. $80
http://www.amazon.com/Digital-Analog.../dp/B0038HX3S8
http://hackaday.com/2007/10/19/optical-headphone-amp/
That's supposedly a DIY optical in from google's blurb, but the site's blocked here at work so I can't verify.
http://www.audiophileproducts.com/fubar4
Headphone Amp + DAC. Tons of different inputs and adjustable gain. $277
http://www.audio-gd.com/Pro/Headphoneamp/Sparrow/SparrowEN.htm
Amp + DAC. Version B of the Sparrow offers both toslink and USB, plus coax. Heard it's around $140.
http://www.beresford-dac.com/beresford-tc-7520/discounted-tc-7520
This is a DAC with 2x coax, 1x toslink, 1x USB with headphone out -- this particular link is to their discounted page for $230 for some units.
You can also look into a Zero DAC import for about $140 or less.