Depends on the encoding as there are multiple schemes. The PC has to send an encoding format the Z906 understands. IIRC, there are options in the optical output properties that allow you to enable and disable encoding schemes.
Also, whether it is better depends on the quality of Logitech's DAC and surround processing vs the onboard DAC and it's surround processing. When sending analog the conversion is done at the source and when sending digital the conversion is done by the destination device. For a high end home theater receiver I would absolutely use a digital connection of some sort. For a desktop speaker system it's debatable as onboard devices are pretty good these days.
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