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No, it's like anything with a headphone jack, once you plug something in, the internal speakers are shut off. just tried it out with my macbook pro (should work similar to an imac). The audio out option changed from "internal speakers" to "digital out" when i plugged in the optical cable.

If you wanted music out of the stereo, while the rest of the audio comes out of the imac speakers, you could get an airport express and hook that to the stereo, the optical cable you posted would work on that too.
You can have music out of computer speakers and the output of the express (synced to each other) at the same time if you wanted that.
 
I'm curious about the optical (digital?) audio port as well. My Apple TV has it and so do both of my cable boxes. How is this "optical audio" used? What would be hooked up to it?
 
I'm curious about the optical (digital?) audio port as well. My Apple TV has it and so do both of my cable boxes. How is this "optical audio" used? What would be hooked up to it?

Most often, they are used to connect devices to surround-sound stereo receivers. Optical audio out transmits the audio signal digitally using light.
 
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