I have the H/K 630. You need to go into the onscreen display by pressing the OSD button towards the bottom right of your remote, and be sure your tv is on and you've got it on video. Once you see the blue screen you should be in the Master Menu and you're ready to make the adjustments. Use your scroll button and go down to In Out Set Up , and you will see it say Digital In , It will give you an option of Analog Or Digital, make sure it's Digital.I 'm not sure about other receivers ,but with the H/K you won't get it to say Digital on the receiver until you are past the menu screen of the movie or DVD-A you are watching. Like the Afro said ,be sure you have an optical cable, otherwise it won't say Digital.
If you still can't figure it out ,pay somneone to come over to make sure you have everything connected properly,and if you don't want to do that, the folks over at CC will be happy to help you out because they sell HK.