I think your question comes down to what's better, analog (left channel/ right channel RCA interconnects) or digital cables (which can either be fiber optic or coaxial).
With the DVD player the answer is simple - analog cables cannot pass a 5.1 channel bitstream (for dolby digital or DTS) so go with a digital cable.
If you have a separate CD player which only has two channel output the choice is less clear, but I would go with digital as well. (I have tried it both ways on several CD players, and I always seem to prefer the digital interconnect. If you are playing CDs through your DVD player that makes it even simpler get 1 digital cable and it will work for everything.
As far as which digital cable is better fiber optic or coax, it seems to be a matter of personal preference. As Matt says, it is simply passing ones and zeros, but I have seen different levels of quality in fiber optic cables though. I have seen some that are as thin as a strand of spaghetti, which probably does the same job as a thicker cable, but it seems to me to be much more fragile and there for easier to break.
