Digital volume control, WADIA style

Some of the highest ranked CD players and digitall processors let you control playback volume level in digital domain. This feature lets you drive the power amp directly, without the preamplfier connected in the audio chain.
One pair of interconnect cables becomes obsolate as well, which is good - we shurly can all agree here.
What you gain overall is a much shorter and simpler signal path. Good achivment, indeed.

But all this comes at a cost. Do we loose anything?

Yes, we do, and it is due to little recognized manipulations conducted upon the digital data stream. We are begining to play with the digital bits representing our musical signal now. Much like genetics, isn't it?
To what effect? Well, this is the question of this tread.

Some well respected manufacturers, Wadia and dCS to name two most noble of them, encourage their customers to take this digital manipulation road as being clearly superior and less audiable than even the best preamplification (=analog manipulation, let me call it by it's name).

Some others, Theta and Mark Levinson comes to my mind at the time, steer away from digital manipulation.
For those who really need some means to control the volume from within their processors or players they incorporate analog volume control circuitry in some models.

What is your personal expirience?

Is digital volume control much audiable?
Is it better than top class preamplfication?
In which case artifacts introduced to the music are easier to detect and more irritate you?