I believe you are on the right track.
i havent ever used any of those parts(or toslink for that matter), so i can't be positive, but the biggest advantage to toslink in the car is that you wont' get any induced noise between the 2 units.
I think there is some processing done before the toslink output though- like vol, and eq.
technically, a separate audio card will be better (a separate, dedicated processor), but in most sound systems, I doubt you will be able to hear a difference in the end result.



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