Adding a Squeezebox - Upgrading Path?

I am thinking of getting a Squeezebox for my source, cd's are being ripped to Apple Lossless. Would hooking this Squeezebox up to my used Theta Pro Progency DAC make a difference or is this technology surpassed by the stand alone Squeezebox

This is for a small living room system that I am slowly upgrading. Currently it is older Paradigm Titan Monitor speakers, powered by a 10 year old Onkyo receiver and fed by an Onkyo 6 disc changer which has an outboard DAC Theta Pro Progency that we picked up (used) several years ago.

Main system is Vandersteen 2ceSignatures, Classe CAP 151 integrated amp and Classe 1.5 cd player. Vandersteens are too big for the living room.
Can the paradigms handle some major upgrading or should I be looking at speakers as well? We have been listening to Dali Ikon 6's and we're also fond of Totems. Major issue here is that the speaker needs to be quite close to the wall in this room...pulling the Titans another 6 inches from the wall,now they are about 8" from the wall has actually been helpful.

Have been away from reading all the audio mags for a few years and am amazed by the changes such as pc audio........ah yes, the audio bug has bitten again!
Thanks for any and all suggestions..