iMac based system -- any advice?

I would like to put together a decent system built around an iMac I hope to buy tomorrow. I don't have the ability to dedicate a room so any advice would be appreciated. Many thanks.
Well, I have an iMac I use as as music server. Unless you're going the wireless route, you'll be sending the signal out by USB. I tried wireless myself and had problems, I'm now wired all the way. You're going to need a dac first of all. If you get one of the dacs with USB input , such as the Wavelength Brick or the Benchmark USB Dac-1, you'll be set to send your signal directly to your stereo. If you get a USB to SPDIF converter (Hagerman HagUSB, Empirical Audio USB Freeway, ect), then your dac options become unlimited. Your choice of dac is one of the biggest factors in determining the audio quality/musicality (or lack of), so you'll want to give this some consideration and do some research.
If I were you I would probably use a squeezebox to get your music to your stereo and then use an external DAC between the squeezebox and your stereo. Not too hard to do and very convenient.

- Chris
Computer Audiophile | Turn Down The Silence
I use the optical out jack on my Mac. My DAC only accepts digital coax so I run the signal through a Monarchy DIP (about $120 used) to get into my DAC. I agree that your DAC is the key.