Only if you're starting with a digital signal, which is not always the case. If you are starting with an _analog_ source (VHS, vinyl, etc.), your statement would not apply. I was careful to segregate my criticism of your blanket "digital > analog" statement from the "what to do about your PS3" for a reason.
I have no idea what you're talking about vis a vis DTS being so much better than Dolby or that I wouldn't notice a difference between DPL-II and DD-5.1 (what are you smoking?). My point was, 7.1 multi-channel PCM output over analog is the same as 7.1-LPCM, TrueHD, or DTS-HD over HDMI. But once you've factored those codecs out of the equation, optical is giving you the same thing HDMI would on the PS3.
Check my sig: I have a pretty reasonable HT setup, probably better than 95% of people here. I have my PS3 hooked up via HDMI. I just object to misleading blanket statements like "digital > analog", which have nothing to do with perception, and everything to do with understanding what "digital" and "analog" sound really are.
The original post was specifically about the PS3 and whether to use the included component (analog) cable versus the HDMI (digital) cable. The PS3 IS a digital platform. This is pretty cut and dry. Staying within the context of this post, which was primarily about analog versus digital in regards to video, my "blanket" statement of digital over analog holds true. I wasn't the one that brought up audio, and in that case I conceded that in mainstream home surround there would be no difference in in analog versus digital.
As for DTS, it operates at a around ~768kBits/sec versus ~448KBits/sec for Dolby digital and thus requires less compression than Dolby. This allows for higher quality sound on average. Now analog Dolby Surround, which is what you get when you use components, doesn't get hit so hard in the digital to analog conversion because your speakers are analog devices. What you lose are discrete channels and the ability to do digital crossover. I used DTS as an example because if you have a high end receiver with HDMI inputs this whole post would be moot because that would just be silly to buy a nice HD-audio capable receiver and waste it using analog audio inputs from a PS3. Since you argued for using the analog audio inputs, you would only have access to Dolby Pro Logic, and thus DTS (digital only) would in fact be superior than using analog in that case.
I'm on the same page with you with audio. No matter how you slice it, audio will originate as digital and must be converted to analog at some point for a speaker to reproduce it. Digital gives more control, and there are alot of variables at place, the largest I must admit being the person at the end of the line. Some people can't tell the difference, some can. I'm fortunate to be one of those people who can hear the difference between codecs.
But as for my first post, I stand by it. For a display, which is what we are talking about, going Digital-to-analog-to-digital is just silly when you can go Digital-to-digital.
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