I'm having the same problem with my Monster cables. The light shines, but there's still no sound.
I think there might be something wrong with the cable because when i was plugging in back in once, it detected the audio and sound came out of the speakers for a split second and then stopped, so I moved it again and got a split second of sound, and then it stopped for good. My guess is the cables are magically screwed up somehow since they've been working for years, or the input on the Xbox is messed up, so I'll open it up and check. But what I don't like is that the optical adapter won't work with either of my Xboxes so that makes me think the optical monster attachment is messed up because the optical cable itself works in other electronics. I called up Monster and the dick on the other end kept telling me that the cables aren't messed up, it's the Xbox. Then why won't they work on any Xbox? He just kept repeating himself. I'll call back tomorrow and maybe I'll get someone more helpful.
[/rant]