TacT said their 2.2XP which is a 24-bit output was compatible with 16-bit machines. They tested my unit and also an external, 16-bit DAC on my unit. Both tests reported no issues with my TacT. However, the Altmann and also an Ack! 2.0 exhibited the same problem in my system.
TacT and Altmann said there should be no compatibility issues. Before I had the XP upgrade to my 2.2X, I was using a Monica 2 DAC and I'm pretty sure I had another Ack! 2.0 with no problems. I know the XP upgrade has many significant modifications but whether this was the culprit I don't know.
TacT also said they've had no reports of any compatibility problems with the XP and many of their users have external DACs. Of the cross section of all the DACs in existence, relatively few are 24 bit. So, lots of folks are using their TacTs with 16 bit DACs without problems.
My month-long odyssey of trying to get to the bottom of this problem resulted in no conclusive story. Generally, I think the 24 bit/16 bit issue isn't a big deal but you might get unlucky and lose the unlottery.