I have no idea why but I cannot get the optical audio out to work (I have firmware version 1.6.2). After reading the forums and giving up I purchased a digital coaxial cable and converter for coaxial to optical. Using the digital coaxial out and the converter as my AV receiver only has optical in I can now get digital audio. I shouldn't have had to make the additional purchase just to get the digital audio to work but at least it does. I still have no idea if this is a hardware fault with the STB or a software issue.
I'm using the same STB with anOptical Toslink cable and no issues.
I do not recall having to make any menu changes to have it work.
Did it work with the Optical Cable work with your Receiver before you got FIOS TV or is this the 1st time you are trying to use it ?
The optical cable has worked just fine for the last 5 years with Dish Network and the receiver. I can only assume that there is a fault with the STB?