Don here is my concern with that unit, if it simply takes the optical output and converts it to analog I'm not sure it will solve your problem. What you were running into was that the TV was sending out a multi channel surround sound signal over the optical out and your DAC could only speak 2 channel stereo. If this unit converts the optical into 6 channels of surround (RF. C, LF, RR, LR & SW) I'm not sure if that will be a usable output if you are trying to listen to TV audio using a 2 channel stereo system. One first instinct would be to hook up the left and right front channels to the stereo, but most surround sound mixes route almost all of the on screen dialog to the center channel so is sounds as if it is coming out of the spot (the screen) where you see the people talking. If you only play the left and right front channels through the stereo you will be missing most of the dialog. What you really need is something that can take a 5.1 signal and mix it down to 2 channel stereo so you don't end up missing any of the audio in the surround mix. Hopefully the unit you are looking at is capable of doing a 5.1 to 2.0 conversion. If not I don't think it will be a viable option.
I hope it works out for you.
Tom