When you turn 'off' the Squeezebox via the remote or web interface
the optical digital output stays on
(I'm not sure whether it's just the LED or whether it is sending digital zero
as I don't have an SPDIF analyzer to hand at the moment,
but I have the feeling that it is sending digital zero
as the attached external DAC does not loose lock).

[I think that the outputting of digital zero when the squeezebox is 'off'
is an unintended 'side effect' of a fix that was put in a long time ago
to ensure that digital zero was output between tracks & when paused
to stop external DACs loosing lock ...]

This is a real pain for auto-sensing switches (used in front of an external DAC)
(like the Audio Authority 1177) that do not look at the content of the signal
but just detect the presence of light
(some like that by Neutek Systems ignore a continuous stream of digital zero).

My external DAC has only one optical input but
I have a number of devices that I need to connect to it optically
[I know: Why do I need anything else other than a Squeezebox ...?  ]
so I'm using the Audio Authority 1177 to automatically switch between them.
The 1177 chooses 'live' inputs on a priority basis, so the fact that
the Squeezebox does not turn off it's digital output when 'off' ('standby')
means that anything plugged into a lower priority input than the Squeezebox
never gets selected ...

I recall Sean saying that it was possible to turn the LED off
when the Squeezebox is 'off'.

[The same issue applies when the Squeezebox turns itself 'off',
for example after loosing contact with the server.]