I think Marakanetz over simplifies things by saying "just a computer". Software can be as complex as any hardware circuit or implementation. And D to A conversion is no easy task either. But I suspect it is the filtering and analog stages that result in the dramatic differences between DACs.
I have used a Pioneer PD65 that I bought in the early 90s. This has been a transport to various DACs that I have owned along the way: Counterpoint DA10, ARC DAC3 II, Electrocompaniet ECD, Muse 296, VTL Ref and Manley Ref. In each case, the change from one DAC to the next was VERY dramatic! I won't go into all the details other than to say the Manley DAC is truly the special one of the bunch.
I then swapped in a Muse 8 transport that I use in my HT setup for DVD. After back and forth between the Pioneer and Muse, I honestly could not hear a difference. It might have been there but it was not obvious to my ears. What I thought the Muse was doing "better" ultimately was there when I switched back to the Pioneer. Perhaps a long term use of the Muse and then putting the Pioneer back in the system would show the Muse's superiority. So my experience here seems to be very different than that of others, i.e., DACs are far more the critical link than transports.
One other note, I tried a MIT digital cable in place of the cheapo stock cable and this did indeed make a sonic difference. There was more harmonic richness to the music so I can only assume the MIT resulted in more accurate timing of the digital signal and thus less smearing. So perhaps I need to play this game again with the Muse. And I have since put in a Genesis Time Lens so I need to remove this and hear if it truly brings on a benefit.
I think we just need to live with some things for awhile to determine their sonic worth. Other pieces in our system are immediately obvious.
And by the way, I tend to focus 3/4 of my time with LPs as I still have not heard CD playback come anywhere close to my Clearaudio Ref TT and the newly arrived Aesthetix Io phono stage. But the Manley DAC is quite the musical product.
John