Thank you for the quick response!
Ok, the cable box has S/PDIF that is not being used because we have the optical cable plugged in below it. The tv has a few unused HDMI inputs. The tv also has free both digital sound outputs - S/PDIF and optical, however, the optical ports on the receiver are being used by the cable box and the playstation.
I got the ChromeCast to have around when traveling, but when my bf takes the playstation to a friend's house it would be convenient. Also nice to have the ease with other apps that I can control with my phone or computer. And I like the ability to cast what is on my screen. I'm sure more capabilities will come out. But for $30, its a fun tech toy.
It works just fine when plugged into the TV, and the audio just comes out of the tv. But obviously it could be so much better with the theater system!