I am using a Motorola DVR from Verizon with FIOS and have used both optical and coaxial for a digital audio signal while using component for video.
I use component cables to my Grand Wega letting the 990 do all work including volume. I have never checked any settings on the DVR. There have been a few glitches with audio and video on the FIOS end but nothing I could attribute to the 990.
I would request a new STB from Verizon to see if the problem continues. That was the advice of the tech that came to the house.