Good grief! How many more steps are required?
I think I'll file this under "something to do when I am incapable of getting off the sofa to change the CD"
Seriously, why do any of you bother with this counter-intuitive nonsense?
I think this is one of the main problems of computer-based audio at this time. If you make any statement supporting any format, any codec, any music client software or any type of computer, there will always be those who disagree with you 'on a fundamental level', leaving those who are just starting on this venture confused, concerned and completely hacked off at the concept. Here's the egalitarian version.
1. Any modern computer (modern enough to have a USB port) will be good enough to act as a source for computer-based music
2. There isn't a great sonic difference between types of music client software. Try a few out to see which one you like from a user perspective
3. Different music client packages 'prefer' different lossless codecs. Fortunately, lossless codecs end up being functionally identical sonically, if not identical in terms of file compression. If one works native to a client program (ALAC and iTunes for example), stick with that option
4. There will always be a few hoops to jump through configuring your computer to play audio files correctly. These depend on the operating system. None of these hoops would challenge anyone who's registered for a forum, and their requirements are clearly published on line
5. To get back to your original post, you need a DAC (usually one that supports USB) and a computer and that's it. You could even do without the DAC, but common perceptions in audio suggest the analogue outputs of a computer are below par in this context. Similar common perceptions suggest any lossy compression format wears a black hat, lossless compression format wears a white hat and direct .WAV to .WAV ripping wears a white hat, gets the girl and rides off into the sunset. Things in reality aren't that simple; loads of .WAV files will eat HDD space at a truly shocking rate, while many argue that 320kbps (and beyond) AAC or MP3 files are effectively musically identical to their lossless counterparts
6. If the computer makes a lot of noise in its day-to-day operation, you might want to move it out of the room and find another way to connect it (through ethernet) to the system. This is where things like Squeezeboxes come into play
7. There is NO point seven
8. If you build up a large collection of ripped discs and downloads, you'll quickly fill up your computer's HDD, so it's a good idea to use external drives. It's also a good idea to back up these drives as the last thing you want is to find your music store crashed and you have to re-rip 2,000 CDs. If you use some kinds of Network Attached Storage devices, you can even use these as servers for Squeezeboxes without the need for a computer to control the system