Yes, there's a TOSLink on there. I think the manual's written by someone who doesn't necessarily understand everything s/he wrote about. For example, explaining TIFF is a "rastor" format, but not needing to mention the fact for just like GIF, jpg and PNG. I assume they mean you're only going to get stereo through the phono jacks, and in that context the statement may be accurate but misleading: the on-board decoder may be stereo only, but of course via TOSLink you're relying on the decoder of the target device.
I've got a similar device by TViX: a couple of features I like are the ethernet port, and the ability to play ISO images. It can play from its internal drive, up to two external drives, and from any drive it can find on the network. Mine's an older version, so it doesn't do most H.264 and, amazingly, the music player doesn't support playlists. Udderdandat, in general these are great devices. I've also got an AiVX, which is similar but in a portable 2.5" format.