USB into DAC vs Airport Express into DAC

Is one better than the other and why? The Airport Express is very convenient but is the sound really that much better using USB?
Depends entirely on the USB converter you use. I mod the AE and put Superclock4 and new power supply and output circuit on it. Even with all of this and running on battery power, my USB converter is still better. Some USB converters will pass 24/96 also. I have a reclocker in prototype stage (Pace Car) that may change all that though. Reclocks the data from SB3, Sonos or AE.
I have a Bel Canto integrated with a USB built in. They are a pretty good company so I assume it is a better than decent USB converter.
AE is limited to a mini-toslink connection (optical) in order to stream digital. I've tried it and it is certainly convenient, but did not sound as good as going wired through a Waveterminal U24 to the same DAC (seemed to have better PRAT and a tad more resolving, especially at the extremes). If you want to go wireless you might check into other alternatives as well (Empirical Audio, Slim Devices, Olive, etc.) for superior results to an AE. Alternatively I believe there are a few companies upgrading the AE (Red Wine Audio is one). I have no experience with these specific products, but having tried the stock AE, I would look to those other solutions myself if I wanted to have the convenience of wireless. There are a great variety of USB/SPDIF converters as well as USB DACs (which simply to that conversion internally).

Your question needs some context. It all depends on your system and your expectations. If you just want to spend $129 on your digital front end (in other words, the cost of the Airport Express), then I think the AE is the best thing I've found. There are a few very inexpensive USB options, but I haven't tried them. As you move up in price, then you'll need to add a DAC to the AE to try to compete with a USB DAC or stand alone CD player. After trying both, I decided to go with a USB DAC instead of the AE/DAC on my main system and I still have AE's with no DAC connected on my secondary systems.