Until recently, I had been just using the stereo audio inputs from my Xbox 360 which only gets you Dolby Surround.
What???? That would not get you Dolby surround.
It would give you stereo.
And could be matrixed in the AVR to Dolby Pro Logic/Neo 6, etc.. depending on AVR
(this would have nothing to do with the Xbox, but what a individual has for an AVR).
I am guessing, that is what you meant?
But yes, optical/coax digital is leaps and bounds over 'stereo rca input'.