How trustworthy is the Optical Audio Outputs on the back of LCD TVs?

You can only experience surround sound if the media source is encoded with surround sound like dvd, bluray, hdtv shows..etc. Regular tv broadcast is stereo or 2 channel only (left and right speakers).Also you have to have a home theater system that will decode the audio and produce the surround sound commonly referred to as 5.1 channel system (5 speakers + 1 subwoofer). The optical audio output from the tv is connected to the optical audio input of the home theater system via toslink (optical) cable.

This is what I know about the digital audio output of most HDTV. To get 5.1 surround sound from that output, you need to be using a digital tuner such as the ATSC or QAM tuner and the feed has to have 5.1 surround sound. If your feed is HDMI then the digital audio output will only be 2 channel stereo. http://forums.cnet.com/7723-7596_102-278301.html Therefore, if you want surround sound from all devices, run digital audio output of each device to your receiver.

It depends on the quality of the HDTV bargain models will usually have poor switching capabilities, while top of the line 3D HDTV's sometimes have better electronics than entry level receivers, what you need is a high quality receiver because generally speaking receivers do a better job at routing and switching signals and maintaining quality than TV's do...

The optical audio port on the back of the TV is Output only. it will decode surround sound but with out a 5.1, 6.1, 7.1 receiver you will not get surround sound. Also only HD channels on cable or SAT have 5.1 surround and not every show does.