mac mini 2.0 with SL, not able to use digital audio with toslink

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Oct 21, 2007
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Here is the jist,

I got a toslink adapter and when I plug it in, all that happens is that audio controls go gray. The red light works, and it goes all the way through the cable. I just switched from an apple tv that used the same cables, only the toslink adapter is new.

The computer recognizes the adapter as digital audio, but there is no way to get it to output any audio. I have messed with the dvd player audio, and the audio midi setup, still no go.

What am I missing here? I really want this thing to work.

here is a screen shot of the audio menu
Screenshot12356.png
 

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