Oversampling DAC Vs. Non Oversampling?

What are the advantages/disadvantages of oversampling vs. non oversampling DACS? I have a Squeezebox 3 and I love it, but I want to buy a DAC and I am not sure which to buy. I listen to Internet radio on the Squeezebox most of the time, which is usually around 128 KBPS and sounds good. However, I want to use the DAC for two-channel home theatre as well, and I will route the DVD through the DAC via a digital cable to listen to music from time to time. What to do? Thanks!!