It's a pretty drastic sort of distortion, effective throughout the full audible range (to my ears). Think of a clock radio with the volume turned up to the full level (this is a bit of an exaggeration, but you get the idea). It is only evident on certain CDs/tracks.
I spoke to Dynaudio, they really recommend a balanced preamp. When I use the digital AES/EBU input the distortion issue is nonexistent.
By the way, in response to the other thread, I'm not very technical, however, I'm not new to audio or Audiogon by any means. Joel at Dyaudio referred to the Air20 amps as digital amps, if you care to debate the semantics with him, feel free to do so.
Also to clarify, my goal with audio gear is accuracy. I neglected to mention this in my other post, and perhaps due to this omission, there was some lack of focus. For this reason, I generally believe that newer gear is "better", in the sense it's more accurate. Now, don't get me wrong, there's nothing wrong with a pair of old JBLs with McIntosh tube amps driving them. They sound lovely, just not what I'm looking for. I realize that the gear that comes out every year is not necessarily an improvement over the past year's, however, if one were to plot the overall progress of audio over the past 50 years, it would be hard to deny the general progress in accuracy in reproducing the audio signal.
By the way, thank you for commenting on the specs of the Air20s. That is really all I was looking for; to know if the specs were up to date. I was just curious. It's not like I was about to trash them if they were not. They sound amazing. I trust my ears.