Which USB implementation, Benchmark built-in or ?

Considering the well-known deficiences of the S/PDIF interface, why bother with a USB to S/PDIF converter when you can get a cleaner solution with the Benchmark USB DAC1 that eliminates S/PDIF altogether?

Elias Gwinn, a Benchmark engineer, recently stated on an audio forum that "the USB signal is first converted to I2S, maintaining its original sample-rate. I2S is a fundamental form of digital audio. When an AES/EBU or S/PDIF signal is streamed to the DAC1 via XLR/coax/optical, it is also first converted to I2S at its original sample-rate. The front panel switch chooses which of these I2S signals are sent to the next stage: the sample-rate converter (SRC) chip. This converts the sample-rate of the I2S signal to 110 kHz, regardless of the original sample rate."

Search this and other audio forums and you'll find that S/PDIF has significant flaws, including poor error correction. High end audio has been saddled the S/PDIF interface, but now Benchmark and other manufacturers have developed USB DACs that eliminate S/PDIF from the signal path.

The bottom line is that if you are considering a Benchmark USB DAC1 or the non-USB DAC1 which requires a USB to S/PDIF interface, you will be better off with the former.

Your follow-up indicates your situation is more complicated than a simple choice between a DAC1 with USB or standard DAC1 with S/PDIF or AES/EBU inputs. My experience is limited to the DAC1 connected via an M-Audio Transit and Slim Devices SB3. I've run both directly into a Bryston 14BSST (the SB3 via RCA unbalanced and DAC1 via balanced XLR).

From reading numerous reviews and owner comments, I suspect the difference between the DAC1, Lavry 10, and other top quality DACs is very subtle and influenced by the Placebo Effect. And frankly, I'd be surprised if there is any appreciable difference betweeen the standard DAC1 and DAC1 USB. Your choice of a power amplifier could have a much greater impact, for example, going from tubes to SS. I'd personally go with the USB version to avoid a USB to S/PDIF converter, while retaining the option to connect via S/PDIF to other sources.

I would note that the Benchmark DAC1 seems to be holding about 75% of its value for resale on Audiogon, so you can probably buy it without a large financial risk.