Will computer to DAC replace transports and cdp's?

Mburnstein - You dont want the computer to have the I2S interface. This would introduce computer clock, power supply and ground noise into the signals. The best way is to use an external WiFi or USB to I2S converter with it's own power supply, preferably battery. My company makes these. The result in unlike any digital audio you have heard. Eliminating the S/PDIF interface makes a huge improvement by reducing jitter to infinitesimal levels. Here is a link to a recent professional review of an I2S-based system:
http://www.americanwired.com/audio/empirical/offramp.html

Steve N.
Empirical Audio

I use a Waveterminal U24 to take the USB signal from my computer and convert it to S/PDIF -- and then run coaxial out to my DAC. The U24 does not require its own power as it pull that from the USB cable: I am assuming this is a good thing?

Pardales - no this is not a good thing. The power is coming from the computer.

Power the Converter from battery or at least it's own power supply and you will realize a big improvement.

Thanks, Audioengr. The U24 has no other power supply options.

It would seem to me that the future lies in USB DAC's, so that extra step of conversion can be skipped altogether. What do yo think?

Steve, Can you make a I2Se unit with the Sonic Frontiers method od I2S connection as I have one of their Platinum 3.1 Sig DACS with I2Se interface. I know it is not compatable with the Muse Audio I2S interface
Thanks