I was recently helping connect up a new home theatre system and I found that there were many ways of interconnecting all the devices that are  commonly used these days. Here's a short description of the options available.

There are two types of connections you can make between your AV devices. These can be either analog or digital. Analog is the traditional method of connecting devices, for example the headphone jack is analog. Common analog standards are S-Video, Component and Composite. Component is the best quality analog connector as it separates the video into its 3 primary colours. The problem with analog connections though is that most media these days originates from a digital source (digital TV, DVD/blu-ray etc), so the signal needs to be converted from digital to analog when connecting devices through analog cables. This can degrade the audio and video quality. The better option is to use digital connectors. Common digital connectors are optical (using fibre optic cable), coaxial and HDMI. HDMI is becoming the standard means of connecting AV equipment and it is also being used in computers. HDMI stands for High Definition Multimedia Interface and as the name states allows high definition video and digital audio to be transmitted through the cable. There are a few different standards of HDMI but the current version is 1.4 and is backward compatible with all previous version. The main difference between HDMI versions is the features supported by the versions. HDMI allows for content protection and various surround sound standards. It is unlikely that you will have compatibility problems but just be aware that older AV equipment may not support all the current features. 

One of the newer useful features of HDMI is called ARC or Audio Return Channel. This allows an HDMI-connected TV to send an audio signal “upstream” to an AV receiver or Home Theatre in a Box when the TV is the source of the audio (such as an internal tuner of an internal DVD/Blu-ray player), eliminating the need for a separate cable. Both devices need to support ARC to use this feature. You will see ARC labelled on the HDMI ports of the receiver and TV if these are supported. For further information or to check equipment compatibility, visit hdmi.org.