I thought it was a little odd, but I'd already settled into a routine of primarily optical connection (most of my devices offer both, and the only two that don't offer optical only). The inputs and outputs of the 990 were locked in by the existing hardware platform of the Sherwood P-965, whereas the 1070/970 was developed from the ground up by Outlaw. As for cost and reliability of optical cables, I've had nothing but great luck with Outlaw's $20 PDO cable. Granted, the BetterCables optical that I paid $50 for is looking pretty pathetic these days, so I can relate to there being some pricey opticals out there.
The front connections include stereo analog, composite video, s-video, and an optical digital. You can also assign any rear digital audio connection to the front input - or even a rear DVI input. (If I buy a PS3 next year, I plan to hook it up to optical4 and DVI2 and then assign both to the front video input.)