I enjoyed my time with N20 immensely (paired with EMM Labs DA2). I believe N20 holds a sweet spot if you can utilize all of its brilliant features. As far as settings goes, my recommendation would be to play with each setting and keep what sounds best to your ears. The same applies to digital output, AES vs USB. All of these choices are subjective…I guess my point is it would be a shame to not explore all the features on a transport like N20 :-)
When I had my N20, I did not prefer any upsampling or DSD conversion. I had my N20 connected using both AES (for files upto 24bit/192kHz) and USB for DSD’s. Another thing I really appreciated was CLM (critical listening mode) in N20. It further drops the noise floor and allows you appreciate quiet passages and space between instruments.
Use best digital cables you can afford. And lastly, if you have not yet; tweak your Ethernet signal with a passive filter from Network Acoustics’s ENO or Muon. They will further relax the sound and take off any digital edge or grunge.
I intentionally held back my feedback on one of the most important feature of N20, the clock input. PM me if you are curious about the master clock input.
Would you please share rest of your system?