I don't think the CDs are indistinguishable from the CORRESPONDING DAD/SACD (i.e., from the same master tape)--the highs are smoother, more natural and have less hash, the dynamics are better and there is an openness or ease with DAD/SACD that you don't get with standard CDs. That said, they are certainly getting more and more information onto CDs, and I have heard CDs so well recorded (such as the Reference Recordings and Harmonia Mundi Cds) that I would agree that they sound better than a lot of SACDs and DADs, particularly when run through an upsampling dac (I don't care how they do it, it does sound better). You're right about recording and mastering, because a DAD or SACD may get you closer to the master tape, but you may not like what you hear on that tape. I'm hoping that more new recordings get made with the new technolgy (the Telarc and Sony Classical DSD recordings are stunning).
SACD vs. DVD-A and Audio DVDs
My experience so far using Muse DVD equipment is that the best redbook CDs sound as good as the best Audio DVDs from Chesky or Classic Records. It would seem that the recording and mastering process has more impact on the final sound than the medium. It reminds me of the notice on early CDs which stated that the CD's resolution "could show the limitations in the source recording" or something like that. Does anyone else think that well executed redbook can be almost indistinguishable from 24/96 Audio or even SACD ? By the way, my experience with SACD has been that the sound is very dry and clinical, and I am wondering whether SACD will fare the same way as CDs, namely that it will take years before the recording and manufacturing process are up to par with the technology. This was evident in redbook CDs. The sound of the best conventional CDs has improved dramatically since four or five years ago.