Whether one will sound better than another will depend on what you prefer, if you prefer either. Whoever you talked to was right - if you have 7.1 inputs on the receiver, then the Sony can decode the DTS-HD and pass it over the 7.1 analog connections. The optical connection is certainly easier, as it's just one cable. However, the optical connection can't handle the bandwidth requirements for the new lossless codecs (like DTS-HD).
You can use any cables with RCA connectors on each end. You just need eight of them. You can buy cables that are junk, but you don't need to spend much to get cables that are good. As one example,
here is a set that has two cables per bundle (a typical stereo set). You would use four of those for a total of about $12 plus shipping.
EDIT: I'm late to the party, but everyone seems to agree.