Benchmark 1, 2 & 3

Has anyone compared these DACs that can comment on the differences? or made upgrades to the newer model? I read through the Stereophile review of the 3 which kinda implies there is not much of a difference between the 1 and 3. Any help appreciated.
I was very surprised to see that. There is a significant difference between the DAC1 and DAC2, as most reviewers said at the time of the DAC2's introduction -- more detail, smoother, less bright -- overall much more listenable. I had the DAC1 and DAC2 at the same time (before I sold the DAC1) and the improvement with the DAC2 was apparent to everyone who heard it in my system. Frankly I wouldn't touch a DAC1 at this time - only get a DAC2. 

I can't comment on the DAC2 v. the DAC3 -- I haven't heard the latter -- but Benchmark itself has stated there is no audible difference (which is a bit hard to believe given the change in dac chips.)  Personally I'd get a DAC2 and pocket the difference.
Compare the Stereophile measurements.
I would echo @dne statements, I have owned all 3. I could not tell a difference between 2 and 3. From 1 to 2 was a massive improvement for me. Allowed me to go direct to amp and sell a preamp. I think a preamp is still better but I needed the cash at the time and the 2 came to the rescue.
DAC1 was extremely clean, but a little thin sounding in the lower midrange. Replacing op-amps made sound a little more vivid and fuller, but DAC3 is much better overall. Sound is still very clean and extended on both ends, but midrange sounds much better - cello sounds more natural, male voices have more "chestiness". Background is darker, sound more refined.
I jumped from DAC1 to DAC3, so I cannot comment on the sound of DAC2. I use DAC3 with AHB2 amp with great results.

I’d like to mention another difference between DAC1 and DAC3 HGC (Hybrid Gain Control) - volume control. DAC1 volume control got static noise over time. I was able to slightly bend the back of the pot and force in "Fade lube" spray (Deoxit). It worked fine for few years after that, but started to exhibit the same problem again. DAC3 HGC, having digital volume control for digital sources, is free from this problem without any negative effects (at least I don’t hear any).