Notebook digital vs analog out to digital amp?

Please let me know which is better:

Audigy ZS -> decent optical out cable-> Panasonic sa-xr55 digital amp -> Silverline SR-17


Audigy ZS -> decent RCA -> $2-300 Rotel/Marantz...-> Silverline SR-17

On the one hand I think I can give the Panasonic a bit-perfect signal with the optical out. On the other hand there's more flexibility in the amplifier if I go with an standard RCA connection.

Or is there a better solution to getting audio out of a notebook on the cheap? Anything better than an audigy around that price? Thanks.
Generally speaking, the DA converters in computers or small devices like MP3 players are not audiophile quality. Taking analog out would not be as good as taking digital out and then doing the DA conversion in your stereo. This presumes that the DA converter in your stereo is beter than the one in the notebook, which it should be. However, you did say that you want to do it on the cheap. In this case, taking analog out may be less expensive.
thanks Markphd - that makes sense. In this case it's a question of whether output from the panny digital amp/reciever beats out comparable traditional gear at the same price point

Also it seems like the Echo Indigo (also PMCIA) would be a significant step up in audio quality for not a lot more
Given that the source signal sets the foundation for the final sound quality; garbage in-garbage out, I believe you would be far better off with going digital straigt into the Panasonic. There is no DAC conversion until at the speaker output, and I believe you would get far cleaner sound. Even in analog comparison, I would expect the Pannie to outperfrom any $200-300 Rotel or Marantz receiver.
Good luck
Arni - appreciate it.
i run two systems at the moment: 1. pc -usb-> waveterminal u24 -coax digital-> sa-xr55 in my office. 2.laptop pc -usb-> u24 -analog cable-> levinson in my living rm. The noise in the living room system is a major degradation, for which i am postponing a remedy, intending to try belkin cablefree wireless usb when available (sept?). you may get lass noise in your first option. will be away for a week sorry in advance for any delaye in responses.
Wkraft - that wireless USB hub is going to be a boon - thanks.
So I'm wondering - will a high-end card be wasted if I just want optical bit-perfect output? Since there's a dac in the receiver, seems like there's no use in paying for one I wouldn't use in the card.
you may need a device in or outside the computer to provide the function of bit rate conversion, which is done upstream of the dac.