external audio DAC w/computer for internet radio

I recently moved and sorely miss my favorite radio station.
Yet, they do have a webcast - which sounds quite bad. Is there a way to improve the audio quality by hooking up an external DAC to my PC? If so,do I need to send the post-DAC signal through a stereo system just like any other line level component or can I still control the volume through my PC keyboard. Thanks!
Here are two interfaces that you might consider that use the USB port of your computer (and allow volume control as usual from the computer, I believe):

Edirol UA-1A USB Audio Interface - $85
Sixteen-bit/44.1kHz AD/DA converter is powered through the USB connection to your computer. Stereo RCA plugs in and out.

Edirol UA-1D USB Audio Interface - $100
Digital stereo in and out on S/PDIF optical and coaxial jacks.

These and other similar products can be purchased at www.musiciansfriend.com and other sites that deal with computer audio interfaces.
These are good suggestions but first check to see what you are getting in the way of the data transmission rate of the webcast. If the data rate is very low, indicative of substantial compression, there may be no point to upgrading the equipment.
Volume control w/PC keyboard is possible if you go the conventional route and just use your onboard soundcard as well as its analog out. However, since it appears that there is some dissatisfaction with things as they are, generally it is considered a good idea as you suggest to use an outboard DAC. Under this configuration the DAC receives an S/PDIF signal from your computer's digital out. The signal can be electrical (coax) or optical (toslink) - depending on the audio interface used. In addition to the devices listed above, another popular choice is the M-Audio Sonica. These will do if all that is desired is use of the computer as an output device. In all these cases, conceptually, the computer just functions as just another digital source, so volume control is performed by your preamp, integrated amp, etc - whichever device which does attenuation duty.

If however recording capabilities are also desired, then further layers of complexity are introduced. In this it may be useful to search the web for "daw" (digital audio workstation) related websites. (Audiogon is not strong on computers and audio.)

For the purpose stated -- just radio -- the expense incurred for an unwieldy and esoteric setup may not justify the ends. Perhaps the shortest (and least expensive) path is simply to upgrade the soundcard in the computer. If that is not possible (say, a notebook is being used), then a USB device, such as the ones named (for example) will likely be needed. I hope this -- limited -- reply helps.