I sent an email to Creative last night regaurding the digital SPDIF output on the regular ZS sound card and how it could be converted to an coaxial plug. Well before I even recieved the email I found exactly what I needed here
http://www.ramelectronics.net/html/RCA-mini-spdif.html and bought it.
I got the email back this morning from creative and it had a lot of information in it that I was unaware of. Here is the main part of the email that had me confused I should say.
"CONNECT THE DIGITAL OUT TO A RECEIVER
1. Use a stereo minijack (1/8 inch) to RCA cable.
2. Connect the minijack end into the digital out on the sound card
(This is the furthest port away from the firewire SB1394 connector).
3. Connect the left (white) RCA connector to the SPDIF coaxial input on
your receiver.
4. Leave the right (red) RCA connector disconnected.
SET THE AUDIGY2 TO USE DIGITAL OUTPUT
1. Go to Start > Programs > Creative > SB Audigy 2 > Surround Mixer
2. Click on the (+) above the main volume control.
3. Make sure there is a check next to "Use Digital Output Only"
4. Please also verify this under start > run > SNDVOL32 > advanced
DISABLE AC3 DECODING
1. Go to Start > Programs > Sound Blaster Audigy 2 > Audigy HQ > Device
Controls > Decoder
2. Select "SPDIF Passthru (Dolby Digital / DTS Digital Out)"
The soundcard will now pass the AC3 signal and raw PCM data to your
receiver to be decoded as 5.1 channel audio.
Please note that only AC3 audio (such as audio from DVD movies) will be
in surround sound. All other audio will be processed by the receiver as
PCM, and thus you will only hear the two front channels. This is due to
the limitation of the S/PDIF connection allowing only 2 channels to
cross over a single wire. More information about this can be found at
http://www.dolby.com.
Note: There are audio options within the DVD software that need to be
configured for Dolby Digital pass-through. These options are different
depending on what software you have. If you need clarification on what
needs to be enabled or checked, then reply with all the options
available under Audio properties within your DVD software.
"
Let me know your thoughts and if there is anyway around this.