I have been pretty disappointed with the D/A converters on the Sony. I've read a few reveiws that say just the opposite--use the analog out's when possible. I'm using a Levinson 36 D/A and although I don't use the Sony as a CD transport, I have tried it in this configuration. I don't think that's a terribly fair comparison, because the Levinson costs over 2x of the Sony. I still think my old Muse would outperform the Sony D/As--but I don't have it any longer so I can not give a direct comparison. As No-Money said--it depends on your D/A. Unless it is a very old, outdated, or poor quality D/A it is likely to best the Sony.
