Both are excellent formats, but S/PDIF coax is typically better implemented in consumer grade products, especially less expensive products.

I, too have heard it both ways. I use the digital coaxial to connect the music server to the Dac but also use the optical connections in the family HT. Most of the Dac's that I have seen only support the coaxial but perhaps this has changed on newer models. I don't think there would be much of a difference. I do find the coaxial easier to connect without pulling everything out.

At first thought one would think that optical would be best.
I mean what is faster than light? The fantastic bandwidth of light. Immunity to EMI.
Not sure, but I would guess that the reason that coax is preferred is because of the elimination of the electrical to light and light back to electrical stages used in Toslink.

Get the StereoVox digital coax. Dunno how they do it, but it rocks...Used it for an external DAC and loved it. So worth the money.

REVIEW QUOTE from Enjoy The Music:

"To that end, the HDXV was placed in a variety of settings as it sat between three different transports - my aging but still excellent Pioneer DVL-91, a Cary CD-303/200 and a Sony SCD-C555ES - and two DACs - a Dodson DA-217 and a highly modified Assemblage DAC-2. With so many combinations, the HDXV was given every chance to both fail and to succeed. Further, it went up against my two long term references, an Acoustic Zen MC Squared=Zen and a custom Audio Magic silver cable, which, while different sounding, are the two best digital coax cables I've heard."

Bit late to the party here but consider that any optical connection means conversion from electrical energy to optical energy at the output at the same at the input. Each conversion has the potential to introduce errors that could be perceived audibly, just saying.