Newbie Setup Question - Digital

I could use some help from the community. I'm looking to make my system digital, using a server as my main source and taking a digital signal through a DAC to my pre-amp/amp then to my speakers. Right now, I use a truly non audiophile setup, streaming music from my computer through an Apple Airport Express into my pre-amp. What do I need other than a really good DAC to keep the sound quality high in making my system digital? I will be using only a lossless format for the source. My equipment is fairly old, Nak Pa7 amp and CA7 pre. Also, is there any way to avoid having to run a high quality USB cable (thinking Bel Canto USB link and DAC) from the server to the DAC?
Airport Express has optical which you can send to a DAC. Just get a DAC with excellent jitter immunity as Airport is jittery.
You'll also want a good optical cable to connect the mini optical output on the AE to your new DAC. Van den Hul makes a cable called the opticoupler that they can configure with these connections. I used this set up for a while and it worked great for me.

Good luck.

And you can get a VERY good quality TosLink (optical) cable from Monoprice for a ridiculously low price, check this out - 12 foot cable for $6.00:

The 3 foot cable is only $3.98. And this cable is VERY well-built, you would swear it is a $100 cable just by looking at it.

Merry Christmas!

Any recommendations on the Tri-Vista tube DAC vs. Bel Canto or Benchmark, specifically related to the jitters caused by the AE? Also, why would I need a Toslink cable? Pre-amp doesn't have digital inputs.
You need a toslink from the Airport Express to the DAC you intend to buy :-)
You need a really good DAC and a good music server device with a solid SPDIF/COAX output like a Squeezebox or Transporter. Alternatively, a specialized DAC with a perfected USB interface like one of the new Ayre or PS Audio units that are coming out soon, or perhaps one of the Wavelength DACs. Proper USB is sort of new.

You also need to meticulously rip your music to your drive using error correction software and lossless or preferably uncompressed formats like .wav or .aiff. Lossess is supposed to be as good as uncompressed but in my experience something gets lost in translation--possibly in the decoding process.
Will the computer be in the same room as the rest of the system?

If not, AE+Toslink to a DAC of your choice makes sense - provided you're happy with your remote interface. Apple remote can run on a laptop or i-phone and works well. The Sonos system is another good choice for distributing music with control (it has a great user interface), although $ can add up quickly and you'll probably still want an external DAC for critical listening.

If the server will be in the same room as the rest of the system, you might want to consider a USB DAC hard wired to your computer.

To your DAC question: I own a Benchmark and it's very, very good, but is on the lean but revealing side. In my system, it's a great match, but YMMV. I also use a DacMagic in a different application which is less expensive and might be a good choice for direct connection via USB, as it has such an input. It is on the rounder, warmer side of the spectrum and is IMHO a great value.

Good Luck

I would expect the software driver used with a particular USB device could make a difference in sound.

I 've heard others indicate that different USB cables make a difference as well, but I have difficulty understanding how different digital cables can make a difference.

I've never known USB or other common computer interface cables, when used within proper tolerances, to drop or alter bits in other applications. What makes audio special enough to hear a difference?

BTW I have no difficulty hearing differences in different analog cables (as opposed to digital) and understanding why these can sound different as well.
I suspect differences in USB cables is purely force of suggestion.
Mapman I think the way what you said about drivers is correct. I was reading something the other day about how the drivers built into Vista/XP are insufficient in some way. I think some of these devices coming out must inject a custom driver into the operating system when connected that instruct the computer how to behave.

As for different cables, I forgot to mention that if you look at the Wavelength Audio homepage, and look at their discussion of computer front ends and what to buy, they seem to assume that electrical/computer noise from things like computer fans and hard drives does not make it across USB into the system. Thus it shouldn't really matter what kind of device you use to serve the DAC--whether it is a silent device with a solid state hard drive, passive cooling or whatnot. Even if you had a video card with a fan that blows like a hairdryer, I don't think it "pollutes" the USB signal the way it does with SPDIF/COAX.
I fail to see how the actual computer and motherboard used does not impact the sound while a USB cable can?

The difference I think has to do with the way USB data is "packetized." I think if a single bit is out of place the entire packet gets flushed. Things get transferred in chunks and not a continuous stream. I was sort of under the impression is that one of the big selling points of USB is that it should do away with the need for expensive S/PDIF digital cables.

I suppose it is possible that it makes a difference but I find it hard to believe because of the computer networking origins of USB.

I just learned the the DAC Magic is pc only - not mac compatible.