I have used one of these chips on a similar project. Before you go too far check the CLK timings. On my project the CS8405 required a CLK which was a multiple of the I2C CLK signal which I could not find on the board (a digital satellite receiver). Other than this it is just a question of connecting pwr, gnd, I2C date/clock, master clk and then pulling the configuration pins high or low as required. Of course you have to put a SPDIF connector on as well. Sharp have a good one just three pins, pwr, gnd and SPDIF data. All the drive electronics are containd in the connector. Both parts cost me a total of around £25 ($35) in one off qty.

Of Course I would ask why you are doing this as buying a PC card with SPDIF out is the easier option :-)