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Yes, I've considered that too as plenty to good DAC/pre-amps are available in my price range. But finding an active (not powered) speaker that is designed for home entertainment versus studio work (dry/fatiguing, analytical) is more of a challenge.
some hi-res options
Just to clarify, the Nuforce DDA-120 is NOT USB limited, at least as far as I can tell:http://www.optomausa.com/soundproduct/DDA120It looks to have the same digital inputs as the DDA-100, which I have and enjoy very much: 2x optical, 1x coax, and 1 usb. I believe the USB is 24/96 max while the others are 24/176 I think.
Steve,Just found a very supportive review of the Dynaudio X14A and while their passive designs haven't lit my fire, who knows maybe the X14A would. Is your recommendation of the Teac based on personal experience?
The Teac does not have line out volume control-only headphone output volume control.
I like the Benchmark AHB2 amp. It is small and I have a Benchmark DAC1 USB, so I think they make great stuff. But the ABHB2 is just an amp. I would combine a DAC that also serves as a preamp with it. Both are small but pack a big punch. I think you stated you have 2000SF of space.(don't know if that is what you are after)