It depends. One way to look at it is: If your DAC is better than your source then USB. Otherwise SP/DIF. The USB is retimed by the DAC, the SP/DIF, AES is not. But basically you have to try both.
Never convert anything.
usb, spdif, or usb to spdif converter
If both a source and dac have both usb and spdif connections, generally speaking which is a better connection, and is it ever advantageous to use a usb to spdif converter over straight usb or coax? It was my understanding that these devices were developed for legacy dacs with no usb input. usb wins over coax in my system (computer based) but I am considering purchasing a converter if that will improve things. Thank you.