Maybe I'm not quite following Chrys, but how are you planning to terminate the end of the optical cable at your computer end.
Or is that the question you are asking?
The xbox cable should look like this I pressume
http://cgi.ebay.co.uk/Component-HD-H...#ht_2227wt_905
or like this
http://cgi.ebay.co.uk/HDMI-HD-AV-CAB...#ht_3087wt_905
as you can see there is a little square slot for an optical cable, so you can plug one of these in the xbox lead but then needs to terminate to an optical input on you pc
http://cgi.ebay.co.uk/3M-TOSlink-Opt...ht_2321wt_1209
is this what your on about dude