Is there some reason you can't just plug the HDMI output from the ATV into the TV and its optical output into your Bose system?
Your TV has two HDMI inputs, and your Bose should have one optical input and several coax digital inputs, so if your cable box is currently using the optical input it probably also has a coax digital output that you can switch to and then use the optical input for the ATV.
Alternately, you can get very cheap (<$20) optical to coax digital audio converter boxes; I've used one once and it seemed to work fine.
If you want the ATV's audio on the TV rather than the Bose for some reason, you could use the Bose as a passthrough (connect its audio out to the TV). Or, if you really want, you can get optical audio to analog RCA converter boxes (like
this one) for maybe $30, give or take. Never used one myself, but they probably work okay.
And if you were trying to avoid using an optical cables because they're expensive, you're buying your optical cable from the wrong source. Digital, being lossless, is always better than analog for connections (particularly audio, since it allows the sound system to do the processing), and I've never heard of people having a problem with cheap optical cables--you'd have to have serious cable problems before it's going to start dropping bits. Or buy from Bluejeans Cable, for quality materials (often US-made) at reasonable prices; Toslink optical cable in any length you want is about $10 + 75 cents a foot. I have a ~20' optical cable from them running from my Mac Mini to my home theater system, and it works flawlessly.
