Sorry for resurrecting an older thread, but I figured that's better than starting a very similar new one.
Right now, I have my music (Apple lossless rips) on a PC with a decent Asus sound card, and the quality is close enough to what I get from my CD player to make using iTunes preferable to spinning the CDs. I want to ditch the PC in favor of a laptop, and stream the music to the AppleTV I currently use only for online movies. Both are hooked up to a good, but dated, Receiver/Amp with a 5.1 system. But when I gave ATV music a try, I found the quality coming from the ATV really and truly sucked. It's unacceptable. So I started looking at external DACs, figuring I'd pump the ATV through one of those, so music is played using better hardware. Seems like a great solution, until I started reading manuals, and found that most DACs with digital outputs won't recognize a 5.1 stream, so you give up the 5.1 coming from the ATV. I like the Cambridge DacMagic Plus, but it clearly states it won't work. Seems the same for the Audiolab M-DAC, and every other DAC I've looked at EXCEPT for the Bryston BDA1, which says it passes the digital signal through without modification. Seems that should work, but that's a $2K component. Overkill for someone like me - a budget buster.
Is there any other solution? Maybe a way to split the ATV signal, sending it to both the DAC (for music) and straight to the receiver (for movies)?
Thanks in advance, and I hope this hasn't been thoroughly covered. I searched hard before posting.