Sound card or not?

Ultimately it depends on the hardware in the computer itself.

In MOST cases I find that if you use SPDIF right off the header on the motherboard it will sound better than most sound cards. Some cards have the benefit of external power, which means you can use a better power supply in addition to having a wordclock input. In those cases a sound card -- assuming you have a better power supply and dedicated clock -- will be worth keeping. But in most cases your best bet is the simple route: use the SPDIF off the motherboard directly.

The optical/toslink output sounds pretty bad. I know ASUS sells a card to connect the SPDIF from the motherboard or you can just wire up an RCA directly -- the info on how to do that is in the manual for your motherboard.

You definitely want to run digital out to a DAC or fully digital amplifier (my choice to bypass the D/A conversion, cables and separate DAC, preamp or amplifier).

Simpler is almost always better.

Hope that helps!

-Ryan
Core Audio Technology

"You definitely want to run digital out to a DAC or fully digital amplifier (my choice to bypass the D/A conversion, cables and separate DAC, preamp or amplifier)."

I'm not sure if I understand what you are saying here. I don't see how you can bypass DA conversion.

There are a few companies now, us included, that offer fully digital amplification.

This means that the amplifier inputs a digital signal and handles all signal processing and amplification in the digital domain. The digital signal is then demodulated to drive a speaker directly. So there is no D/A conversion in the signal path, no A/D conversion, and no separate preamplifier.

To be more specific on how this technology works...

Your source outputs a PCM signal, which is a square wave (pulse code modulation) either via SPDIF, I2S, Toslink, etc. This PCM square wave is input into the amplifier. This goes through a digital receiver which reclocks the data (or not) and sends it off as an I2S signal to a PWM modulator. This PWM modulator takes the PCM square wave and converts it to a PWM square wave. This PWM square wave is then amplified, generally by an H-bridge power stage output similar to high-end Class D amplifiers. That PWM signal then goes through a sophisticated feedback and anti-jither circuit to eliminate distortion and a simple output filter. The output filter takes the PWM square wave and demodulates it to drive a speaker directly. In this way there is no D/A conversion, no A/D conversion, and no separate DAC preamp or amplifier.

More info on this process on our website. Also more info in these great articles:
http://www.academia.edu/1029853/A_Distortion-free_PWM_Coder_for_All-digital_Audio_Amplifiers

http://asp.eurasipjournals.com/content/pdf/1687-6180-2007-094386.pdf

How does this compare to standard Class D amplifiers technology?

A Class D amplifier, or many so-called Power DACs, have an analog input. A Class D amplifier takes an analog input, converts it to a triangle wave, and then inputs it into a modulator to convert it to a pulse width modulation. This is much higher distortion and adds an additional D/A conversion before the amp input. A power DAC generally is just a DAC and then Class A/B or Class D amplifier in a single chassis. It is not a fully digital amplifier, though they try to play it off as such. Does not sound anywhere near as good, though there's nothing wrong with integrating the devices and simplifying the system.

Does that answer your question? Or at least give you a foundation from which you can do a little more reading?

Best,
Ryan
Core Audio Technology

Im using the soundblaster x-fi hd with great success (if you like headphones). Its easy because its USB and you dont have to open the box and its also useful for laptops. Sounds great.