i have ~$500 invested in my digital front end - modded art di/o dac for ~$200, and audio alchemy acd pro for ~$300. it's ancient by digital standards, but it's still competitive w/modern digital costing more than ten times that. (which speaks volumes to the extreme law of diminishing returns when it comes to digital.) and, for ultimate fidelity, i'd take something like toxteth's analog set-up over any digital set-up at any price.
about the only thing i have seen in this thread that i don't agree with is john-tcg's preference for a solid-state preamp. regardless of source, there is no way my preamp will not have tubes. for small-signal preamplification, tubes rule. now, for ultra-ultra-small signal preamplification - like a phono-stage - s/s is ok imo, if it's fed to a tube preamp.
ymmv,
doug s.