I have recently purchased (actually, still waiting for it to come in the mail) a new soundcard, headphones, and 5.1 system for my computer. So... models:

-Razer Barracuda AC-1 card
-Razer Barracuda HP-1 headphones
-Logitech Z-5500 5.1 system.

My understanding of the electronics and physics etc. involved audio systems is extremely limited; I do, however, know "good sound" when I hear it. I am otherwise fairly technologically proficient, especially in the area of computers in general.

That said, what I have learned from reading various posts regarding analogue vs digital signal as it pertains to my set up (feel free to correct any misconceptions I may have acquired), is that using an analogue connection will basically employ my sound card for decoding purposes, while using a digital out such as S/PDIF or coax will basically offload the decoding job to the Z-5500 processor.

Assuming my basic understanding on this is correct, is there benefit either way as far as quality and accuracy is concerned to which processor (ac-1 vs z-5500) decodes?

The reason I ask, is because I had hoped to have my headphones hooked up via the proprietary port that they share with the card ("dongle" included for card to convert to regular rca style jacks), while using the optical out for my speakers, thus eliminating the need to reach behind my computer any time i wish to switch the output device. Also worth noting, my primary function will be gaming, mostly with the Half-Life series; I do, however, listen to plenty of music and movies as well via the same system. With this in mind, what are the pros/cons of my different configuration options, and what would you suggest as an ideal setup? Thanks in advance.

anyone??

I don't know how well the Z-5500 decodes, so I would tend to prefer to leave the job to the sound card and use the analog connection. I do use a digital connection sometimes on mine, but only with well known, high end equipment (I output mine to a full Denon 2808 reciever). In your case, unless you have specs on the capability of the Z-5500 to do digital to analog conversion (I'm actually somewhat surprised that it can - I haven't encountered a set of speakers that can before), I would leave the job to your sound card though.

If i were you i'd use the analog and let the card do the decoding. The z5500s are cheap speakers so i can't imagine them having a decent decoder in them, whereas the Razer is a fairly decent soundcard so should be good at decoding audio etc.