Charles,
Don't work yourself into a tizzy.....one of the benefits of these specialist internet forums, 24/7, is that you tap into a wide range of knowledge levels to help you out....so you don't have to sit there pissed off and confused.
So first, know that any new audio-video receiver you get is going to have some terms you may not be familiar with. The JVC is not any more complicated than most. By virtue of it's inexpensive retail cost, it's probably less vast in it's overwhelming choices by necessity.
It's also a remarkably good sounding receiver in many instances so it's worth hanging onto, at least, until it breaks in at 300 hours and you can decide for yourself if it sounds right to you.
I looked at Toshiba's website on the 3960. P. 18 in your Toshiba manual describes how and what to hook up. Because the Toshiba is only a $69.99 retail list DVD player it lacks analog discrete outputs for anything but your left and right channels. So, you can hook up an analog cable from your left and right outputs to the corresponding FRONT left and right on the JVC's back panel. This will allow your Axiom main speakers to operate and gain the highest fidelity from the JVC. However, in doing this (because your Toashiba does not have a discrete analog output for your sub), your sub will not be hooked up.
To do this you need a Y-splitter. Here is a good one to buy...a solid Y adaptor that you hook up at the end of one of your analog cables either just after it exits the Tosh or before it enters the JVC and you 'split' the signal so that you can now run one line for your main speaker and another 'tap' to run a single analog cable to your sub.
Now, you will have both front speakers and your sub running for movies and music and getting the maximum fidelity you can in your set up. The DIGITAL (bits and bites that you do not and cannot hear) to ANALOG (what you can hear) conversion is done within the Toshiba in this manner. This is also referred to as D/A conversion...if that acronym is screwing with your head

.
The other option is to run a digital cable, made specifically for digital transmission of signals from the digital out jack on the Toshiba to the Digital Input jack marked DVR/DVD on the back of the JVC. It's near the cover towards the spring clip terminals. You are now bypassing the D/A in the Toshiba and directing the JVC to convert the digital signals to analog and send them to your right and left front Axiom's and your sub.
The way to set this up becomes a little tricky...you need to read the section in the JVC manual on how to set this up. It would take too long to explain here. Using the Toshiba and JVC with the digital cable allows you greater flexibility for your system, but at the expense of sonics.
You may not care and want the flexibility and range of features offered thru the digital cable hookup...but most of us are snotty audiophiles here that care to maximize the sound we hear. Whatever floats your boat.
The real compatibility problem for you is NOT the JVC, it is the Toshiba as it only has front left and right channel outputs. That is the other option you have...replace the Toshiba with a slightly more expensive DVD player that has outputs for front and rear left channels, center channel, subwoofer and some today even have surround rear channel outputs. Witha DVD player like this you can plug in the front left and right cahnnels in, and your sub, and get the maximum fidelity from your JVC.
Good luck.
