[elmerohueso]

I have seen many people mentioning passing audio via optical - what is the advantage of this over audio through HDMI?

The advantages are actually in favor of HDMI, as optical can't handle the DTS HD and TrueHD DD (AFAIK). Other than that, both optical and HDMI pass a purely digital audio signal (or course, HDMI also carries video), so that it can be decoded by your receiver itself.
The only "benefit" of optical would be if your receiver does not have HDMI input, but does have optical audio input.