Skooby
The Smart Link, SPDIF and Optical connections on the back of the 598 take the DIGITAL stream out of the 598 out to the processor.
The Smart Link has more bandwidth to carry more information and allows for example MultiChannel digital audio streams to be transmitted between the 598 and e.g. 568.2.
In a way that is perhaps easier to understand, the Smart Link connection between an 800 and 861 consists of 3 Individual Digital Connection Cables between the 2 units. When playing a DVD-A for example, each of the 3 cables will carry 2 channels each of the 5.1 mix on the DVD-A. Each of the streams is still Digital though.
Equally, when the 598 or 800 is asked to “Decode Bitstreams” it will “split” the DD or DTS stream into separate channels. This then allows the 568.2 and 861 more processing power to allow for upsampling of DD from 48/16 to 96/24.
If “Decode Bitstream” is set to No on the 598 or 800, then the 598/800 will output a SINGLE Digital stream to the 568/861. The 568/861 then decodes and processes the stream into the 6 channels, resulting in DD/DTS at 48/16
In each of the above cases, the 598/800 will act as a Digital “Transport” only and the output is not converted to Analog at any stage.
The only output stream from the 598 that goes thru a Digital to Analog conversion (DAC) is the stream output on the Analog outputs.
Hope this helps??