A quality DAC can be had for less than $500. I use this one with a Squeezebox and the new(ish) enhanced audio plug in to allow direct output via USB:
http://audioengineusa.com/Store/Audioengine-D1Of course the sky is the limit with audiophile equipment, but I've been really pleased with this little DAC and it didn't break the bank.
COMMENT: Nothing wrong with the Squeezebox Audiophile model. Just keep in mind that it uses internal D/A converters to provide 24/96 resolution out of the analog outputs. You will not get that high a resolution on coax. Only HDMI provides for HD. Why? Copyright protection. The content is coded and a HDCP handshake between two devices is necessary to release the better stream. I guess the USB connection is for digital input, otherwise present conventions limit USB resolution to 16/44.
REFFERENCE >>> http://www.avguide.com/forums/blu-ray-24192-output-coax
The only way to really hear HEAR (as in listen) to HD audio downloads such as flac is via the HDMI connector and an external receiver/processor. You can also get full resolution from the analog outputs, but using analog RCA jacks to feed your amplifier limits your fidelity to the chip set used by Squeezebox ... and they're not saying. HD Audio chip sets can run from a few dollars to several hundred. That's just the cost of one chip. So you get what you pay for. The reviews of Squeezebox have been favorable. However, unless the Squeezebox model you have has an HDMI output, your resolution is limited and the number of channels is also limited to two. USB only supports resolutions of 16/44 as the HDMI patent limits resolutions on all connector types except HDMI. Only HDMI passes full 24/192 audio resolution in multi-channel formats.
You see the manufacturer's all want you to buy new equipment. What a cleaver way to make us all spend more money then by patent protection. And that is how it is. HDMI is the only pathway to full 24/192 audio resolution over two or 7.1 surround. OR use the RCA jacks. ~swd
So now I'm really confused! No argument (I guess) that you can't get 24/192 through coax/optical/USB, only HDMI (explained in the reference you posted). But 24/96? You can't get more than 16/44 on coax/optical/USB? I have a 24/96 DAC with USB, coax and optical inputs only, how can that be?