Will a DAC drastically improve Apple TV?


I have been thinking of getting the apple tv so i can have my entire itunes collection available for play through my new audio system. Problem is, i have connected my ipod through an rca cable to my system and it sounds terrible. I have connected my laptop and certain tracks sound ok, others, terrible. very muddled, no detail, and no bass. Will a dac such as the bel canto dac 2 make a dramatic improvement with mp3 playback (192-256kps)? Also, the Tos link, is the optical link that would work with the apple tv right?

I am new to all this stuff. Just recently bought a mcintosh 6450 integrated, and a pair of gallo 3.1s. Was thinking of getting a hard disk player such as the mcintosh ms300 but probably not for a while. And if the apple tv with a dac will sound pretty good, that may be the easier route.
farjamed
Farjamed,
The difference is significant and for the better. Get the DAC. Can't you get a Benchmark DAC1 for the price of a Bel Canto DAC2? I'd get the Benchmark.
When I added a DAC, a cheap one, it made a huge difference. And the sound I was getting from the ATV analog outputs was not horrible.
I just recently added an Apple TV to my system and a PS Audio Digital Link III with level IV Cullen mod both connected with an Audioquest Optilink 5 toslink cable. I have been really surprised with the sonic results. I would say the combination has been on par with the Ayre CX-7e CD player it replaced with maybe not quite as much bass articulation but definitely very detailed. Spatial resolution is also pretty darn close to the Ayre.

I will add though that I saved all my CD's as Apple Lossless files, not MP3 so I would be suspicious that part of the problem may be the compressed audio files you are using. It's been a while since I have listened to MP3 files in my system and I certainly wouldn't describe them as grossly distorted but they were lacking in ultimate sound quality. I would think also that even if you use MP3 files that a dedicated external D/A converter can only help matters as compared to the internal D/A's in the Apple devices, although I have not listened to the analog outputs of the Apple TV to compare.

I say give it a shot. Use the Apple TV with the analog outputs and if you are not crazy about the sound explore getting an external D/A converter. I don't think the Apple TV will be the weak link used as a digital transport.

If you are going to use an Apple TV you will probably want to get the 160 gb version. I have saved roughly 320 CD's in Apple Lossless and it has taken up apx. 95 gb. If you have wi-fi you may want to also consider using an iPod touch with the remote application. It allows you to navigate the apple tv without having to have a monitor or TV on. I love this feature
I once had a Bel Canto Dac1, and its sound was fantastic, far better than an Apple TV's analog outputs. I'd say that a Dac2 is a very safe bet to be noticeably better than no dac at all. It'll also hold its resale value.

FYI, the Bel Canto is a bit on the smooth side of things, which is usually a good fit with low-grade digital sources.