Quote: Originally Posted by
Magician 
Thanks -- can you further elaborate on the USB DAC setup? Would I then drive speakers directly from the DAC unit? I looked these things up a bit on the net, however I'm not versed enough to assess if the stock speakers on E46 (I think they are balanced / 3-wire) would be compatible with such setup. By compatible I mean all factors like power/interface etc.
Appreciate a little bit more clarification.
Not really...I don't own a usb dac, I own an NX and use the optical out to feed my processor. You would use the dac to drive your amps, for which there may be a converter of some kind for your balanced inputs. The DAC would provide, hopefully, a lot better analog feed than your NX is. But there are plenty here and at headfi.org that do use them, and info on them is only a search away.
A DAC's only job, really, is to take a digital feed from your USB port, and turn it into analog output for your amps, kinda like your audigy does (only better and cleaner). It would depend on processing prior to the dac what sorts of things you do to the sound you send it.