Although I have tried the optical output to a DAC, my Airport Express are all analog out for less critical locations than my main system, and I haven't spent much time to be able to critically evaluate the optical output to a DAC.
The 2nd Generation Airport Express wireless N models apparently have high jitter, and were problematic for some ESS Sabre DACS. Peachtree Audio has added a switch to adjust the jitter aperature to acommodate this (at the slight expense of sound quality) and the Eastern Electric MiniMax DAC users were forced to find an older 1st Generation wireless G model as a solution.
However, it works with most other DACs, and most Airport Express/Apple TV users will tell you that the optical out into their DAC sounds very good.
But people seem to defend what they have and Logitech Touch users will tell you that their setup is superior.
I prefer the user interface of iTunes to the Logitech SlimServer, so I am an iTunes user. You can pick up a used Airport Express for ~$50 used from eBay, Craigslist, etc. and could give it a try. If you don't like the results, you could always put it into service in a secondary location. Also as I previously mentioned, Rogue Amoeba's Airfoil program allows you to stream audio from many other applications to an Airport Express.
Steve
