Yes, a DAC with a changer is a great idea. I also have a Channel Islands set up that gets used on occasion with a Marantz multiformat changer. Dusty's DAC is MUCH better than the stock DACs in the Marantz.
It's been my experience that a good external DAC can outperform the DACs of many a one box player. The only challenge is the jitter introduced by the cabling, but this is taken care of these days by good jitter filters, like the little Monarchy.
I believe that regardless of format, the final sonic product has to do with the analog stages of any audio system. Comparing the economics and effort between most seperate DACs and most on-board DACs, the separate DACs are making fewer compromises and allowing for greater optimization than an on-board DAC. Thats at least a large part of why in electronics separates, generally, out perform integrated units.
Some of the cost is simply the cabinetry, but not all of it. There's much more cost/effort in a good simple external DAC like a CIA, Scott Nixon, etc., than a manufacturer can afford to put in a one-box player that might cost $1K or more.
I also believe that transports provide a much smaller contribution to the audio chain than the DACs. In my reference system I've tried everything from cheapies to Stereophile Class A transports and I don't know that I can here a difference. But changing DACs? Instant difference.
- SJ