Need help setting up new pc audio system

Just purchased a new desktop - Velocity Micro Edge Z55. Didn't get either of the two offered sound cards - both Creative labs products. Went with integrated sound option with intention of purchasing after-market sound card.

Would like to get top notch 2/2.1 channel audio without going too crazy with the $$$. Looking at several sound cards by ASUS and Auzentech and HT Omega. So many options - can't figure out which one to buy. Can someone point me in the right direction. Should I run Firewire/USB out to external DAC? I would prefer to avoid that set-up unless its really necessary.

Also, very interested in new active speakers. Presently have Cambridge Soundworks Microworks by Henry Kloss which actually sound pretty amazing for what they are. Nevertheless, I'm sure I can do much better. Looking at Audioengine 2 which are very well reviewed. Also looking at Dynaudio MC 15 and Quad 11L active. Would love to hear from someone who has heard all three.

"Should I run Firewire/USB out to external DAC?"

For best sound with the active speakers you are considering, I would say yes.
I'm in alignment with Mapman.

Auzentech looks like it keeps up with Windows OS upgrades. X-Fi™ Forte 7.1
Low Profile PCI Express Sound Card would be my choice. I would also look into
if they have upgrades for Windows 7 which was released Oct 22. Also note, the
Forte has a Hi-Fi OPAMP, headphone amp, and Coaxial (left) and Optical output
(right) output.

What is your external DAC?

Dynaudio MC 15 and Quad 11L have great sound qualities without using a sub. I
also like very much the Bang & Olufsen BeoLab 4 Speakers for PC or Mac which
is closer to audio experience of a floorstanding loudspeaker. The Adaptive Bass
Linearization offers superior bass performance from this small cabinets.
Incredible rich and smoothness from the OEM of ICE technology.
Thanks for the responses guys.

I have no external DAC at this point. Would like to avoid buying one if possible. I recognize there will a difference in sound quality, but if the difference between a $200 sound card and a $400 - $500 external DAC isn't going to be really dramatic, I'd prefer to spend the $$$ elsewhere (i.e., would I be better off with the external DAC and the Audioengine2's or the sound card and one of the other speaker choices).

I'll definitely add the BeoLab4 to my list of "what speakers should I consider?"
Deringer, could you clarify exactly what you're trying to do? Are you seeking a decent set of speakers for your computer so you can listen to music while using your computer, or do you want to use the computer as a front-end to a larger 2-channel rig? I would suggest a different approach for each of these two possible goals.

1) Good computer sound: Look into some of the active speakers (check the archives for some suggestions). Alternatively, consider a small integrated amp, such as a Creek, powering small monitors.

2) Computer as front-end for other rig: Get an external DAC, with at least coax + Toslink digital inputs (virtually all soundcards have at least one of those), and preferably USB inputs. This DAC will send its output to your rig. You will then need to look into music management software (iTunes, Slimserver, MediaMonkey, etc) to provide easy access to the music.

I hope that helps.

Try something like this:

It comes in two models. I've not heard it but it is getting some very good reviews. I don't see how you can go wrong for the price.

Firewire to firewire/spdif converter and then any dac you want. Not limited to dacs with usb input and not draining cpu cycles. USB, even in asychronious mode, still transmits packets, while firewire transmits streams.
"Cambridge Soundworks Microworks by Henry Kloss"

The only thing is that, the MicroWorks II is equipped with a less-powerful amp that delivers only 20 watts to each satellite and 40 to the bass unit, far less than the original MegaWorks 210D's.
So, new pc is here.

Inputs of old sub disintegrated, so definitely going to get new speakers. Have a pair of Audioengine2's being delivered tomorrow, but I have a feeling they are not going to cut it. In the meantime, I am really focusing on the Dynaudio MC 15's.

Question is do I go with a good sound card, or with USB out into Cambridge DACMagic, or something else. My concern is that while the unit is well reviewed, the USB input option doesn't seem to be so great. I'm not sure I want everything upsampled, plus if I understand what I am reading USB is limited in terms of its output resolution. So any high resolution audio files on my hard drive would be downsampled and then upsampled. That doesn't seem very intuitive.

Are there any external DAC's that will accept a firewire input that don't cost $2,000?
all you need is a firewire to spdif convereter-$200 (MAudio) - then, you can get any dac you want, not limited to USB or firewire input.