I have to agree with Ivan's post. Personally, I like upsampling. In your case, though, you need to get your system set up on a more fundamental level before you notice the difference in processing.
If you are starting out in audio, I can give you some good advice. I've always been good at getting really good sound while spending the least amount of money. You already have a good dac and a decent integrated amp. If you want to get your system good enough so you can hear the differences in your dac, you need to do 2 things. First, is speakers. You don't list any so I'm guessing you will probably need them. My favorite entry level high end speaker, by far, is the Vandersteen 1c. Its an incredible value. If for some reason you can't go with the Vand, there are quite a few alternatives, as well. Monitor audio and JM Labs (Focal) are also great entry products that I like very much.
You can probably stop with a good pair of speakers. To really take your system to the next level, however, I recommend doing 1 other thing. Its not that expensive either. I would get a passive preamp/volume control. Your NAD has a really great and useful feature. If you look on the back of the unit, you will see the amp and preamp sections are connected by RCA jumpers. This allows you to use it just as a preamp or just as a poweramp. In your case you would go from the dac to the passive unit, and then go from the passive directly to the amp section of the NAD. That will bypass the NAD's preamp. I know that probably sounds a little odd but doing so will yield a big step up in sound quality.
If you are starting out in audio, I can give you some good advice. I've always been good at getting really good sound while spending the least amount of money. You already have a good dac and a decent integrated amp. If you want to get your system good enough so you can hear the differences in your dac, you need to do 2 things. First, is speakers. You don't list any so I'm guessing you will probably need them. My favorite entry level high end speaker, by far, is the Vandersteen 1c. Its an incredible value. If for some reason you can't go with the Vand, there are quite a few alternatives, as well. Monitor audio and JM Labs (Focal) are also great entry products that I like very much.
You can probably stop with a good pair of speakers. To really take your system to the next level, however, I recommend doing 1 other thing. Its not that expensive either. I would get a passive preamp/volume control. Your NAD has a really great and useful feature. If you look on the back of the unit, you will see the amp and preamp sections are connected by RCA jumpers. This allows you to use it just as a preamp or just as a poweramp. In your case you would go from the dac to the passive unit, and then go from the passive directly to the amp section of the NAD. That will bypass the NAD's preamp. I know that probably sounds a little odd but doing so will yield a big step up in sound quality.