I agree with TLS that this thread has turned into mountain of misinformation. To make matters worse, we seem to have lost the OP who only wanted a simple answer to his question.
I'll avoid commenting further about differences between CD and vinyl. Enough has been said already.
Now, on to the original poster's question, are there differences in sound coming from a digital source, such as a CD, if the signal goes into an AVR by digital or analog ways.
If the digital signal from the CD is sent to the AVR by digital cable (optical or electrical coax cable makes no difference), the DAC in the CD player is bypassed and the DAC in the AVR decodes the signal to analog.
If the analog signal is sent to the AVR, the digital signal was decoded by the DAC in the CD player. Many AVRs take the analog signal and digitize it, because all the processing it does, such as bass management, is done with the digital signal. And finally, before sending the signal on to the amplifier section, the receiver's DAC converts the signal to analog. So the original digital signal has been converted to analog, back to digital, and to analog again.
The Yamaha RX-667 (and other AVRs) apparently does have a way to bypass this for analog signals. If "pure direct" is selected, an incoming analog signal is sent directly to the downstream analog processing without being converted back to digital.
I've tried listening to music by these various paths, and I don't hear a significant difference.
If others, such as those who posted above, do hear a difference, fine. I don't have any problem with your personal experience or preferences. But don't expect to offer that personal experience as broad-based advice on this forum without being challenged.