Use ATI provided DVI/HDMI converter. You don't need to buy it. Call the video card vendor and they will send you one. Every card comes with DVI/HDMI converter and HDMI cable. Sometimes a note is provided on the box to call the vendor to request such item.
HDMI audio will only work if both ends are HDCP compliant. Not a problem for most people that have purchased an HDTV / monitor in the last few years, but still needs to be confirmed with your equipment.
I've got one PC to TV with a DVI to HDMI cord and I run the audio through the headphone slot to the TV, works fine. You just need a headphone splitter on your PC if you already use the hole for your screen audio. You'll then need a headphone extension cord of some sort - should be a black square hole on the rear of your TV for the headphone cord. I then have my tv joined to home theatre with a HDMI cord and that works fine...
I have an ATI card with two DVI ports and no HDMI. Using a DVI-HDMI cable to a TV, in Windows I get no audio (as is well reported on the internet, suggesting an ATI DVI-HDMI dongle is required) and the option to enable it is greyed out. However, in Linux, with the standard radeon driver, it quite happily provides audio to the TV.