When I did have a CD changer, I'd connect it to the Digital LInk III via optical cable. I had a nice affordable glass toslink cable that I used for this. But considering everything I did on the computer side; DBPowerAmp for ripping, JRiver for playback, JPlay plugin, decent USB/coax cables, and the USB converter, the SQ from the changer was so bad by comparison, I very rarely used it. Eventually it went to the garage sale. Now when I get a new CD, I cannot listen to it until I rip it, which sometimes is a drag, but it's a sacrifice I've chosen to make.
One more thing - you asked above if 320kbps was CD quality, it is not. No mp3 is ever CD quality, although Apple has engineered a process for their 256 aac files that sounds very good. The differences between lossy and lossless music tracks can be subtle, but they are definitely there, I've heard them.
Lossless formats (1411 kbps):
.m4a (apple lossess, compressed file but uncompressed on playback)
.wav (cannot tag with track names, artist info, etc)
.flac (has variable compression rates, but is still uncompressed on playback)
.aif (mostly Apple only)
.wma (windows media, typically encodes with DRM for copy protection)
Lossy formats (320 kbps max):
.mp3
.aac, .m4a (iTunes, any bit rate on a .m4a file above 320 is apple lossless, not AAC)
.ogg (popular for streaming radio on the internet)
