I just got up and running with something similar. Using the SPDIF out on my Epia 10K to an H701. Yes, the H701 needs a control unit such as the C701 but it is not that big. All along I thought I was going to have to mount a full DIN unit but when I got the C701 I was surprised to find out it is only 1 inch thick. I found a spot on my dash to mount it with velcro.
I can't speak to the sound quality yet as I havent even tuned mine (no time yet).
I'll warn you about some pitfalls though. You can refer back to this if you actually go this route.
The jumper position on the MB to enable the spdif is wrong in the documentation. Beware. I can’t speak to the Epia 12K though.
I used the Dayton spdif-toslink converter. It says it wants 6vdc. Ignore that and supply it with 12v. It will be fine.
Enable spdif out in the advanced tab of the volume control.
Software volume control is with the “wave” slider.
It is critical that you get the latest drivers for the AC' 97 codec because the driver I loaded first was crap. It made my mp3s sound like 1k sampling. Use the via arena for all drivers. If you get drivers from the links next to your specific MB you will get old drivers.
There are several others using this route for audio. Maybe one of them can speak to the sound quality. BTW, if money is no object, look at the H901.