xyyz: Glad you got it setup right for dolby digital. It's pretty damn sweet, yes? After hearing DVDs in dolby digital it was hard to go back to my 2 speaker setup.
NicColt:
Of course an RCA cable can carry a digital AC-3 signal.
There are two types of SPDIF cable a Coaxial cable with RCA connectors and an optical cable with TOSLINK connectors. The capabilities of both are exactly the same.
In the case of a Turtle Beach Santa Cruz Sound card it has a 3.5mm minijack that TB dubbed the Versa jack. One possible function of this is Stereo analog (Center and Sub). Another function of this is to output an AC-3 stream. This little versa jack is a non-standard SPDIF connector carrying a standard SPDIF signal. Turtle Beach designed the versa jack so that you could use a 3.5mm mini-stereo to RCA converter (which is a fairly standard item) so that you could get this standard SPDIF signal to a standard SPDIF connector. Then you have an RCA plug carrying an SPDIF signal, take a Coaxial cable with RCA plugs at both end of it and hook up this little plug to your reciver/amp and voila you have AC-3 in your AMP.
A standard RCA cable can carry a single Analog channel (that's why you typically get them in a red/white or red/black pair so they can carry a stereo signal), that same standard RCA cable can also carry a digital AC-3 (or DTS for that matter) stream. I'm not sure where you get this idea that you need optical. A coaxial cable with RCA connectors has the exact same capabilities as an optical cable with TOSLINK connectors. The connectors are not compatible, so it's possible with certain amps you will need one or the other becuase the amp won't have both, but an RCA cable can and will carry an AC-3 signal from a TB Santa Cruz to a reciever that has RCA SPDIF input (in this case the DTT2500 which does have that RCA SPDIF input port)
I believe that you may be right if you restrict your statements to an SBLive! I'm not 100% sure whether or not the SBLive! can output a standard SPDIF signal, my SBLive has no digital outputs so I've never cared to take notice, but the TB Santa Cruz is.
An analog signal the waveform created by the changing the voltage (over time) along the wire represent the actual sound, and the speaker just uses this voltage to control it's electromagnets to move the speaker and make sound.
All a digital signal is is a series of 1s and 0s, represented by two different voltages. The reciver accepts this series of 1s and 0s and then "decodes" it into analog channels (6 of them for AC-3) and then sends that analog signal along 6 separate wires to speakers. (AC-3 is one possible format for those 1s and 0s, DTS is another one, PCM is a 3rd though it only has 2 channel encoded not 6)
So as you can see in either case the RCA cable is merely acting as a conduit for voltage to move from one place to another, whether that voltage is being interpreted as 1s and 0s for a reciver or as a sound waveform the RCA cable really doens't care.
Edit: I'm not trying to make you look dumb or anything here, just trying to add some knowledge, so if you know any or all of this forgive me.