Do I need to do something special to get toslink input to work? I want to record some audio from my A/V receiver.  It has Toslink output, so I want to use that.  I plugged a Toslink cable into that (I can see the red light!), and plugged the other end into a toslink-to-mini-toslink adapter, and plugged it into the "line in" port of my Mac.

Unfortunately, it doesn't seem to do anything.  In the Sound control panel, even with the Input Volume turned all the way up, the "Input Level" shows nothing at all.  In Audacity, recording just records empty silence.

I have two Macs, and the behavior here is exactly the same on both.  One's an Intel Mac Mini Core Duo ("Macmini1,1"), and the other's a Macbook Core 2 Duo ("MacBook2,1").  According to the spec sheets, both have Toslink input.  I frequently use Toslink output on both Macs using this cable.

I've recorded audio onto both Macs using analog audio cables and Audacity before many times.  Is there anything special I need to do to enable Toslink audio input?
Just to be sure:

You mentioned checking the Sound control panel on the Macbook input side (I assume you selected Line In as well), but what about the output device on the Mac Mini?  Plugging in the cable usually switches system output to Line Out, but not necessarily the output of whatever application you are using.  So check both the Sound control panel output and the settings of your playback application (if it has any).

Also make sure the TOS connecter seats all the way (usually with a click).  The Line In defaults to analog and, IIRC, it only switches to TOS if it senses a non-conductive plug clicking on some little switch.