Converting your analog source is a totally different issue. MSR-1 can point to your external digital location or you can copy them into MSR-1. The file format should be flac. MSR-1 can be configured to read other format but we recommend flac.
MSR-1 is good for ripping CDs.
For a reasonable price, MSR-1 does this for you:
1. It integrates a good ripper with a customized player and a customized database (that can support classical music).
2. It is a compact and stylish machine with high quality connectors.
Unless you can do those kind of stuff yourself (put together all the correct software, find a PC motherboard with good analog and digital out, replace the cheap connectors, and put them all together in a nice chassis), spending $2250 for MSR-1 is a more cost effective approach

.