I have a 60" Sony KDS XBR1 and LOVE it!

When watching local channels (for HD) I use the Sonys built in tuner for OTA programming. I have an optical out for the sound for these local channels and have that running to my 990.

I prefer the signal quality over my HD DirecTv satellites tuner for locals. The picture is better, period.

My personal opinion is I would prefer coaxial over optical. The signal is the same, but the optical plugs on equipment seems cheaper. The optical plug is cheap plastic and the cable has to be connected exactly right for it to connect correctly. Coaxial is much easier to plug in and more secure.
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Panasonic TC-P65S1 65" Plasma HDTV, Marantz AV 8801 Preamp, Outlaw 7700 Amp, Klipsch RF7 (X-over dean G modded) RC7 (X-over Dean G modded) RS7 CDT-5800C speakers, Outlaw LFM1 EX Subwoofer, Oppo BDP-93, B & O Turntable, Toshiba HD-A2, Sony CD & DVD 400 disc jukeboxes, DirecTV HD-DVR, PS2, PS3, Wii, Harmony one remote, Monster PowerBar 1200 for the TV, sub, PS3, HD DVD and Wii, Tripp Lite Isolation Bar for the Amp, Pre-Amp and other sources.