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1- any Rca Cables could transfer the signal
2-it does good quality because transferring signal is digital to digital but analog does better quality...
3-latency same as other input and it depends on your buffer size..
4-what is better?
5-you have to check it out but maybe fine,,,

1. It requires a decent rca cable, not any could do - some of them don't have the required 75Ohm resistance.
2. If anything, analog has less quality as it has 2 DA/AD conversions, while SPDIF doesn't require any.

For digital audio it is important that the devices are synchronized. One device (the master) sends the clock, and the other (slave) syncs to it. In practice this means that you connect them both ways (Virus S/PDIF output to Ultralite input, Ultralite S/PDIF output to Virus input), and in Virus' Config menu, set Audio Clock=Auto or External.
BUT
I also have an Ultralite Mk3, and tried exactly this, and had to give up . The Virus would display 'Clock problem at S/PDIF input', and the sound had audible artifacts, indicating that it didn't sync properly.
Now I don't know if it's the MOTU clock that's bad (no idea how to test it even!), or the Virus cannot slave properly (in which case, why provide this option at all?). The artifacts were gone when Virus was the clock master, but then the Ultralite doesn't work unless the Virus is on.

The artifacts are easily heard on a single oscillator sine wave patch (open INIT patch, set balance to -100 and OSC1 wave to sine). Does it sound clean or distorted ?
Please let me know how it works out for you!

P.S. Get a DV (digital video) cable, it should be fine for digital audio too.

I have a MOTU 828mk3, and I noticed something about the SPDIF synchronisation that you may be interested in.

I use my Virus without the VST, using the USB for MIDI only and the 6 analog outs, as I already described in other threads.

I have the SPDIF OUT of my 828mk3 linked to the SPDIF IN of the Virus only for clock syncing.

If you do not want to have a sync error message on your Virus, you have to power on your stuff in a precise order :

1. your MOTU
2. if your computer is not running, boot it and WAIT it have finished, because the internal clock of your MOTU may change once it has established the link with the OS. (by example if your MOTU is configured in 48 kHz in standalone mode and in 96 kHz when linked to your computer)
3. power on your Virus.

If the message comes again on the Virus, you don't have to repeat all these steps, simply power off (not sleep mode, a complete power off: unplung the power cable) and power on again your Virus.
But if you always execute these steps in the right order and then you don't change anymore the clock frequency of your MOTU, you won't have any problem for your whole session.