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FWIW there are lots of entry level priced and very compact DACs with Toslink input that substantially outperform that built into the AEX, but IINM you'll still be limited in resolution when using Airplay.My wife's system upstairs system uses MBP>AEX >Toslink>Citypulse DAC>DIY EL84 amp. When I want to do some serious listening, I plug the Toslink cord into the MB and switch speakers to computer. It's not even close.Note that I post this precisely in the hope that I'll be corrected or advised on how to improve performance while retaining use of the AEX. I'm not averse to installing a 3rd party media player such as PureMusic, provided it's transparent to end user very familiar and comfortable with the iTunes interface. That'd be the owner of said laptop. I'd been considering running a Mini as dedicated music server and a cheap FW DAC such as the Edirol, but that would of course require a new learning curve for both of us on remote control of same. baby steps ...
I stream music from both my old Mini and my MBP to Apple TV V2, then into a Peachtree Audio Decco, whose DAC decodes and sends along the analog to my amp via preamp output. I also use USB from the Mini into the Decco, and here's the thing- I can't hear a difference. At all. I don't know what to make of it, except maybe that since iTunes only plays 16 bit, and the Decco's DAC decodes 16 bit only, maybe the resolution just isn't high enough to make an audible difference. That's been my experience. Any thoughts?
I'm not sure I have optical output on my G4 mini to try that. Does a USB to optical converter exist?
And I'm not necessarily recommending that you do the same, just that if you had an optical ouput on the Mac Mini (which I see now that you don't) that it would have been something you could have experiemented with for no extra cost.
What DAC chip does the AE use? is it possible to upgrade airport express DAC?