We have a lot of experience with the Shanling as we were at one time a Shanling dealer (one of the first in fact).
The variable out is digital and I would NOT recommend anyone use this unit as a preamp. You will experience a significant loss of dynamics and resolution. To Shanling's credit, they NEVER intended, nor designed, the unit to be used as a preamp for non-headphone listening, but folks have done so anyway. So, if anyone is seriously considering the Shanling, plan on using it WITH a separate preamp, otherwise you will be less than pleased.
IanATC actually desribed the sound of the Shanling quite well. It is quite musical and has a very pleasant midrange presentation, but that is about it.
Basically, the Shanling has wonderful looks (I would find myself mesmorized many times by it's looks, especially with the lights dimmed

). But in the end, it turned out to not sound anywhere near as good as it looked.
With that said, I have heard that the various mods increase the players performance a great deal, but by the time you do this, the end cost will be far greater. And I can think of quite a few players that will beat it in the those "upgraded" price ranges.
Is it a "bad" player? Definitely not, in fact many folks like it very much, but you can do better for less money, IMHO. But, it sure is fun to look at

We do carry a player that costs less and we feel is superior to the Shanling (we dropped Shanling after hearing it, it was a no-brainer). I will not mention it here, as I do not want to "advertise" in the this forum. Feel free to contact me via email if anyone wants additional details.
Best Regards...Mike - Father & Son Audio