Leaving any discussion on whether 192kHz makes a difference, or whether coax is better than toslink anyway... Can anyone explain why toslink has a ceiling of 24 bit/96kHz and won't pass 192 kHz?
True, though the cheap plastic fiber type have a pretty low bandwidth of around 6Mhz, so can't reliably go beyond 96K sample rate, and will consequently introduce large amounts of jitter in the recovered clock. The SPDIF interface was never designed for high sample rates, but if you have good clock recovery and jitter rejection at the DAC, it can still work fine. The multi-fiber type of TOSLINK cables have a much higher bandwidth, but some computer software limits the output rate.
About six or seven years ago, Panasonic sold a dvd-audio player that would pass a 192kHz stream via Toslink (I also checked this myself by going to a Best Buy and looking at the player's menu [a salesman was nice enough to hook it up for me to a nearby TV] and in the digital output portion of the set-up menu was the option to allow 192kHz signals to pass). Here's a discussion at head-fi.org about this player(s): http://www.head-fi.org/t/277867/panasonic-dvd-s47-optical-output