See this thread:

http://en.community.dell.com/owners-club/alienware/f/3746/t/19440487.aspx?pi21932=5

Basically, if you want stereo and multi-channel sound (either bitstream or Multi-Channel PCM), you will have to use only HDMI (to HDMI equipped AMP).

Also, if you want to try to get optical sound working, keep in mind:

Optical and Coax SPDIF deliver up to 5 channels via bitstream. Only 2 if PCM.

... and use DVI along-side optical. Don't try to use HDMI unless it's solely used for video and audio. Computers get confused when mixing HDMI with anything else.

I disabled the hdmi audio but still nothing? Would that make a difference 

Also would dvi to hdmi work? Or Dvi to vga?

If you insist on using Optical ...

Optical (PC output) to Optical (Amp Input)

DVI PC Port, DVI-to-HDMI Adapter, HDMI cable, HDMI Input on TV. This insures only the "video part" of the HDMI signal gets to TV (and all the components know it).

... that might work (for at least "some kind" of sound).

You can try HDMI Port, HDMI cable, HDMI on TV ... and set (on TV's Menu) "Home Theater Speakers" if you haven't already. But like I said ... that doesn't usually work.

If your Amp isn't HDMI capable, you really need a new Amp anyway (they are cheap now-days).

I disabled the hdmi audio but still nothing? Would that make a difference

ok I have dvi to hdmi, and optical cable plugged in, still absolutely no sound at all.

is it a driver issue?