I just bought this a couple days ago. Related gear: Krell s300i, vandy 2ce sig2. in the local store, compared a couple of songs from my laptop to the cd via some onkyo $1700 unit. that store setup was more onkyo stuff and some martin logan spks.
building from the bottom up as i am, i was looking/waiting for "replace you cd player forever" and i found it!
surely there's better cd players etc... but i definitely think that with a little effort you can get very satisfying sound from a pc and that's great!
CA has some good reads on their support page about computer audio and http://thewelltemperedcomputer.com/index.html has some good info as well.
i'm using a clevo laptop, 2core 2Ghz 2gb ram, winxp svc pack 2 with the cambridge drivers and ASIO.
anyway, i'm running some $40 3m balanced mic. cables from the dacmagic to the krell and my speaker wire isn't that great so those will be the next budget driven upgrade :)
i think that compared to 5 years ago or even 2 years ago there's a LOT of great options and a new understanding of pc aduio.