http://forums.electronicarts.co.uk/xbox-360/367086-hd-no-sound.html
The Xbox 360 has an optical output that carries the surround sound signal. You need to plug an optical cable into the Xbox 360 (it plugs into the video/audio output component cable) and the other end into your surround sound system.
Component:
If using HDMI you'll get one of these with an Elite:

Optical cable:

To confuse things even more if you have an HDMI input on your surround sound system you can pass the audio through the HDMI cable too.













