I bought this primarily to connect my new Apple TV to my 10 year old Sony hi-fi. The Apple TV outputs are HDMI and optical, so the HDMI goes to the television, but unfortunately my telly doesn't have a phono (red and white) output so I can't then route the audio back to the hi-fi. So the optical output goes to this little gizmo for conection via phono to the aux in of the hi-fi. As the gizmo also has a digital co-ax input I can connect the telly too. At last I have escaped the tinny sound that the flat screen tellies all seem to have, without having to add more clutter with a home cinema system.
I can now stream iTunes wirelessly from the main PC in the next room and play through the hifi, plus by 'mirroring' from my iPad I can watch BBC iplayer and other catch up TV with hi-fi sound. I'm no hi-fi expert, but to me the sound quality from this convertor is excellent. And it's only the size of a matchbox, so very easy to find a convenient place for it behind the television.