I have a PS3 80 gb connected to LCD monitor with HDMI to DVI cable. I bought an AX360 and connected it to the PS3 via optical cable. I changed the "Audio output settings" to "Digital out (optical)".

I turned on the power for "Ax360" and plugged in the headset to that decoder box. But i couldnt hear any sound in the head set. So i replaced the headset and having same problem with the new one too.

Please let me know if i am missing anything.