If the Toslink optical output is a problem, you should get a Monarchy DIP. It will convert the Toslink to either an AES/EBU or S/PID coax signal. It also functions as a jitter reduction device. I believe they cost $200.
I want digital audio
I love my hi-fi CD based systems, but I'm sure loving my iPod too! I can take 30-40 uncompressed CDs with me in the car in something the size of a deck of cards. I take all those CDs to the office, or travel anywhere, and pull up any song or CD or playlist and have some tunes. I can't wait for higher storage capacity and better audio capabilities. I can just imagine having my entire CD collection available at the press of a button. I'm sure the bleeding edge components will cost a lot (like the Linn system), but the iPod is setting the model for doing it pretty well for low cost (compared to many high-end systems). Some may turn their shoulder to it, but I think the iPod and the concept of digital audio are exciting and I'm looking forward to seeing where it leads over the next year. I hope someone comes up with a digital "transport" to connect to the DAC of my choice. Perhaps CES 2004 will have surprises for us in this new arena.