Exactly what is oversampling?

OVER-sampling is something that nearly EVERY CD player does. Oversampling basically mulipies the frequency of the input by a number (generally something like 4x, 8x, or 32x) to match the operating frequency of the DAC. This also gets rid of some of the high frequency spuriae that some down range components (amps, preamps) may not be able to deal with.

UP-Sampling actually fundamentally changes the input itself. Instead of just merely multiplying the frequency, it actually adds bits to the input signal, well before the DAC. It helps assure that the DAC makes far fewer errors, and although it doesn't IMPROVE the signal, it helps to keep it in tact. Hope this helps. Cheers!

I forgot the second part of your question. No, just because the DAC over/upsamples, it doens't mean it's good. Or even adequate. There are SO many engineering challenges in designing quality digital equipment, and the DAC is only one small part of this equation. How well does the transport take the info off the disc? How much jitter does the clock introduce? Is the signal path clear, or cluttered? Is the DAC operating at the same exact frequency as the transport? How is the analog output stage?

There are many quality factors involved, and I would definitely go so far as to say that those Pioneer player are FAR inferior to the Audio Aero. Just my 2 cents.