Is a DAC still needed?

Plus, the lines are getting blurrier. Enter the Peachtree Grand Pre, the new Audio Research and Classe preamp/DAC combos among others. Had the chance to see/hear all three recently and all were impressive driving serious downstream gear (ARCs new class D amp to Wilson Sophia 3s, and Classe to B&W 803Ds). Loved the flexibility and engineering on the Classe--including tone/tilt control. All were built to truly leverage streaming sources with all the necessary techniques to get it right, such as async USB, galvanic isolation, etc. All sounded great streaming iTunes files (ALC) from a variety of hardware including Macbooks, iPads and iPhones. The ARC and the Classe were both $5k and in todays world, both seemed to be a great value--USB + SPDIF DAC + Preamp - Digital Cable and some great user controls seems like a deal to me.

Definitely a DAC makes sense, now more than ever, for the computer/music server based systems.
Spinning silver discs will continue to happen, but will dwindle to a trickle.
Music servers, like the one W4S is currently offering, rips CDs upon insertion, thus one could transfer a CD collection onto the server seamlessly, on "as listening" basis.
Disc transports will slip into oblivion. I'm with Paulsax on this one...

I would suggest that its only a matter of time before the dac becomes the audio source and the cd player is a historical oddity like 8 tracks. not sure I see much logic in spending lots of money on a CD player. Course thats just me but I bet that as time goes by more and more folks fall into this group.

If your internal DAC is better than the outboard, no. It probably doesn't matter how expensive your player is, someone may find a more expensive outboard DAC for it. But better sounding? Like Rrog said, it depends on your player. Then like Tom6897 said, there are other sources that could use one.

It depends on what CD player you have.

Yes and No.

It depends upon what you want from your source. Not all CD players will have the ability to stream music from a computer or play the same types of discs. Some are more universal than others. The type of chip-set will vary as will jitter control, noise floor, reputation, etc.

You should map out what you want from a player and the types of files you will likely listen to and the the connections needed to accomplish that. (CD, CD-R, SACD, HDCD, Flac, WAV, Internet Radio, iTunes, USB media, Ethernet etc.) upsampling, No-Oversampling, Hi ReZ.

There is a lot to consider isn't there?