I do have some knowledge here but I am curious to hear other folk's experience with this.
Upsampling allegedly allows you to theoretically obtain a higher bit rate than CD was designed for. Of course this is all theory, and to do it right requires amazing amounts of money. (See DCS DAC's)
The problem I have with upsampling is that the digital filtering is nasty. It adds so much garbage to the signal. Things all of a sudden appear in the music that aren't really there. In the past several years, we have learned to live with digital noise, and some have even learned to like it!?
Some folks will hear digital noise and say that it is merely extra "air", or "sparkle". When you live filterless, and non-oversampling for a bit, you begin to hear what digital noise really is, and how great life is without it. You begin to realize which sounds more like real music. (that is IF you know what real music sounds like)
I would strongly encourage anyone looking for a DAC to try any of the non-oversampling/filterless DAC's out there. I have listened to all I could get my hands on. From the 47 Labs Shigaraki, Audio Note's 3.1x balanced, Zanden, and the Tube DAC from Scott Nixon. There are subtle differences in these DAC's. I would say my favorite, and the best implementation of non-oversampling that I have heard is the AN 3.1x balanced. I will also say that it bettered the Nixon DAC only by an extremely thin margin. I'd say that the difference was like swapping interconnects. A bit of depth, and bass control was gained with the AN. But it was not what I would quantify as a $6000+ difference.
Try both! Try the modded out DI/O's and the Nixon DAC. That way, you're only out a few hundred, and you can see which you like better.
If you're not convinced yet, then ask me about JITTER. hehe
B