Hard Drive based system

I posted this in the digital forum and got no responses.

I've read all of the threads I could find on a "server" type system. I plan on running a hard drive, to a Waveterminal, to a DAC. My question is, can a system like this sound as good, or better than, my cd player? Is it all up to the DAC? I want the convenience of a server, but not at the expense of sound quality.

I currently have a Marantz 8260 CD/SACD player.
If done right, it will sound better than 99% of the cd players on the market. It will not play SACD's.
I have had my hard drive system for almost 3 years now, and I will never go back to a cd player. The ability to find over 400 cd's without leaving my listening chair makes for a much nicer experience. AudioAsylum has a section on computer audio that is a big help.
Absolutely. And even if it was slightly less good sounding, the benefit of having all of your music at your fingertips, under easy control, will outweigh anything you give up. But I don't think you'll give anything up if you set it up correctly.
So there a better converter than the Waveterminal? I'll be using a Mac with iTunes.
I have been running a hard drive for about a year now and it sounds superb. As stated above, the convienience is fantastic. Foobar has been my choice for the front end, with a Chaintek 710 for bit perfect output. The DAC is the Musical Fidelity Tri Vista 21 to a Bryston BP 26 and 4 Bryston 7BSST amps. What sounds best is up to you and your ears.