You could use it to connect an external DAC, possibly as an upgrade. It could send 7.1 channel audio to a receiver. You could use it to send 5.1 also, one optical cable is much neater than 3 analog cables. Of course you can just use the card's DAC and analog outputs if you want, having options to do either is nice though. You can also use both analog and digital outputs at once which might be useful for someone.
I don't believe you said which card, but I assume your asking about the SoundBlaster Z? You only need to plug the headphones into the headphone output. In the Sound Blaster software, check that it is on headphone mode. Under the SBX pro studio menu you can enable the surround and other processing options if you want them.
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