New dCS Paganini system

Does the new Paganini transport use the Esoteric VRDS NEO mechanism like the Scarlatti?

Am I crazy to be considering this expensive 3 box system when the trend seems to be moving toward servers?
Why don't you just go with the Esoteric P1/D1 or P3/D3 units? Either is better than the DCS stack. Who cares about servers unless you are too lazy to change disks or you must have some kind of worthless multiroom setup.
I used to feel that way about remote controls until I tried them.

Worthless multiroom setups notwithstanding.
This is not an easy question because the Paganini stack is not server friendly. On the old dCS stack you could easily have your cake and eat it too because the upsampler was separate from the transport and had inputs. If we were talking about the old stack I would have said just get both.

The problem is that in the new system the upsampling to DSD is handled by the transport unit and not the dac or outboard upsampler, so I don't think you can upsample an external source. There is no digital input on the Paganini transport. The upsampling is dCS's biggest selling point in my view because it radically improves your old CD collection. It is vital in my opinion. So if you go with the stack you are committing to a disc based system because you can't upsample external sources, and that will limit your upgrade path.

There is an all in one unit called Puccinni, however, which houses a transport, upsampler and dac, which is supposed to be terrific. That unit also has two digital inputs and you could upsample CD/PCM data streaming in from a server and have the best of both worlds.

The reason why I tend to argue for servers over transports these days is that they have a much better price/performance ratio. For example the $300 squeezebox's digital out can give a $5k+ transport a run for its money, and those types of devices are likely to improve a great deal over the next few years. The processing is where the magic happens and so I suggest an inexpensive server device to act as the transport and concentrate your investment in upsampling and dac gear.

My assumption is that the $300 squeezebox will sound better with a Delius/Elgar/Paganini than a $6000+ transport would sound with processing gear of a lesser calibur. My Squeezebox replaced a formidable Goldmund transport and sounds fantastic feeding a Delius/Purcell.

It isn't so much that servers are overtaking disc players in terms of sound quality, it is the functionality. Being able to actually browse your music collection from the couch and que up whatever you want instantly is not a feature to be taken lightly if you listen to a lot of jazz and nonclassical music where you don't always want to sit down and listen to an entire album. I found I lost interest in disc based players completely once I started tinkering with the squeezebox.

I myself would not even consider investing in high-end processing equipment that could not upsample an external source from a music server or computer. I would be more enthusiastic about the Paganini if the transport had a digital input.

On the other hand, if you are the type who just puts an album on and listens to it and you don't care about the extra functionality, there is probably no disc playing system better than Paganini and it will do true SACD, which is something music servers can't do and won't be able to do for some time, if ever.
Blackstonejd, thank you for your informative and well considered response.

I clearly have a lot more research to do. The functionality of servers is appealing as long as the sound is good and it looks like we're headed toward that eventuality.
Check out the dCS Puccinni. It is based on the Paganini stack and has the inputs that you want.

The sound quality is there, provided you use uncompressed .wav files and a quality digital cable.

Unfortunately, computer and hard drive based music storage is catching on at a time when there are less standalone dacs and processors than ever, and even fewer high-end cd players that have digital inputs.

Any high end dac or upsampling device that has a digital input can be mated with a Squeezebox or Transporter type device.