A laptop (hard drive) can make for an excellent front-end if it is done right. Definitely stick to the lossless file formats to start. You'll need a USB to S/PDIF interface. The best one I've tried, and still own, is no longer made, but you may be able to find a used one on eBay: Waveterminal U24. Similar products are made by HAG and Edirol among others. You can also sell your Benchmark DAC and get a USB compatible DAC like the Apogee Mini-DAC (USB version). Alternatively, you can purchase a device like the Airport Express which allows the digital output from your computer to be streamed wirelessly to your DAC via a Toslink connection (in the case of the AE). I think the Squeezebox does similar duty, but I have no experience with it so can't say for sure. Will it be better than a transport? That'll be for your ears to tell. For me I can't tell the difference.
Marco
Marco