I own an internal X-fi creative Xtrememusic soundcard and used this as a primary device outputting to my amplifier for over a year. The sound was good, but not as good as my old cd player. I also found out that there was a slight channel imbalance when running a 3.5mm to RCA to my annoyance. Due to the soundcard being so close to other wifi emitting devices within the pc case, there was at times interference. Sometimes there was a slight humming or ticking noise, and overall I believed the sound quality could be improved.
Therefore after much research I believed the best way to solve this problem was to remove the soundcard from equation, to process the sound outside/away from the fans, electrical systems, boards and cards that degrade the sound. I bought the CA Dacmagic, running a high quality Chord Optichord from the soundcard to this little box of tricks. The difference is night and day. The sound is processed by the Dacmagic, jitter and distortion free via optical signal. The sound quality improved vastly, bass now more impressive yet more controlled and rythmic. The mids and higher frequencies sound less muddled by the bass, they sound completely seperate. You can identify everything that is going on in the music, movie. sounds are alot more vivid/directional.
For 2 channel music and 2 channel movie playback/game playback you cant beat an external Dac.
I sold my cd player as my pc now sounds as good as the cds did. I only use the soundcard for optical out as my motherboard has no optical out. I absolutely recommend you buy a dacmagic, if not any external Dac. I also hooked my Ps3 to the Dac, playing blurays and games is so invloving. Then connect the Dac to the Amplifier via phono rca and you are sorted. You will be as close to audiophile quality sound from your PC as you are going to get.
If you are looking for multi channel playback, use for games etc then the decision would be somewhat harder to take, as my recommendation is based upon 2 channel setups.