I may have finally found the place that can answer my questions.
Reading the other posts here makes be believe this is all a lot more complex than I had been aware of.
1. digital is digital?
--- Are there different "versions" of "spdif out"?
--- I always asumed spdif out was the same no matter what the device outputting it. Are there factors that effect the "quality" of the digital signal?
2. If there is a sound card that can output a "proper" digital signal, does the playback software have an effect on the digital signal?
--- Is foobar any better or worse than winamp j river etc.
--- What would be the most inexpensive sound card available if the only concern is the quality of spidf out.
3. Assuming the computer's digital output is ideal, and internal DACs are bypassed on all devices, doesnt that mean the computer is as good as any other output device available?
-- Why spend thousands (tens of thousands) of dollars on a cd player if the computer can do the same thing? (can the computer do the same thing)