wht does a preamp do?

The components which perform the function of the preamplifier can easily be put inside an amplifier (or a source component, especially if the source component has a really big box to house it). When you think about it, back in the late B.C. era ("Before CD" - as opposed to the current "A.D" era (After Digitial) - tongue in cheek), moving coil cartridges' output levels were in the single digit millivolts, which is about 1/1000th of the output of a CD player (current low-output MC carts are about 1/10th of that). Most amplifiers also do not have a built-in RIAA equalizer (required for records). It takes several gain stages to get from a millivolt cartidge output to a speaker level output. Most amplifiers simply don't have that much gain built-in.

In the age of single source systems, the role of the preamplifier could be taken over by a beefier output stage of the source component. However, beefy power supplies with high-quality high-gain output stages would increase the price of the source component. In a multi-source system, it may make practical sense to have to pay for a high-gain stage once rather than having one attached to every source component.

In your case, from what I understand, the implementation of the digital volume control on the Wadia 861 will reduce the bit rate of the output. The best sound will always come with zero digital signal attenuation (volume set at the top level). Unfortunately, that means the relatively high output voltage (double what most CD players have) means that one is obliged to turn down the volume most of the time, reducing the quality of the signal. In your case, the preamp allows you to control the signal in the analog domain, which will make music with lots of low-level detail (closely-miked cello or piano solos, acoustic jazz trios, etc) sound immensely better when played at less than wall-shaking volumes.

When I first got my Audio Aero Capitole CD player I ran it through the pre on my receiver. I had a hard time getting past my own personal bass and treble adjustments that were on the receiver.

Then I tried feeding the Audio Aero to the amp (McIntosh 2102) and bypass the receiver. This sounded much better. Using the Audio Aero's tubed volumn control I was able to power two amps into two locations with that balanced and unbalanced outputs.

At the moment I am using two unlike amps in the same room to bi-amp and I am now running the signal through a McIntosh CR12 AV system which has 4 individual preamps that can feed from one source if I like and this allows me to somewhat correct for the mismatched amps. With the McIntosh it sounds really good.

I have been playing around with passive attenuators for the last couple of weeks, it has been hellish trying to get it to function properly, I have tried several configurations and values, from the single pot, to a resistor loaded pot, to a series resistor and a pot, Then chnanging the values of the resistor and the pot.
All this because I made a simple test pot box and it sounded amazing. My amps have very low sensitivity, that is supposed to help. The passive is intalled inside the amps (monos) and 3 inches away from the input tube. One IC only.
I have noticed that changing the values changes the sound of the passive completely. If I go to the lowest resistor value for the pot I get more dynamics, If the series resistor is too high it cannot solve complicated passages of the music, if it is too low the extension of the high freq. will go down (no highs), so it has been a fine tuning effort but clearly rewarded.
The main diferences I noticed between the passive and the active are:
Passive:
-Darker backround...incredible backround! no noise.
-More extension on both sides (when porperly intalled)
-The music is more relaxed but dinamic non the less.
-The tone of the instruments seem more natural.
Active:
-Dynamics man, the impact of the drums and cimbals and horns is so big it puts you there.
-The tone of the instruments seem very real. (dinamics help here)
-I would not have noticed but yes there is a certain distortion not heard on the passive.

To round it up I would say the active preamp is more "Be There" distortions and all, while the passive is hypnotical...

Beware; I used to have a top of the line DAC with volume control and in no way would it compare to the passive I have now, I cannot compare side by side since I sold it about a year ago, but it seems pretty obviuos to me now.

I cannot tell you I prefer one over the other...

I can run my B+K preamp in passive mode, and I've spent the last couple days messing around with passive vs. active mode. One might think that because it's a decent, but not terrific preamp that passive would sound better. But I've found exactly what jsadurni found--better imaging, brighter and the like with active mode. The voices seem to hang there in the air with the active mode, instruments come from outside the speakers. It does reveal imperfections--some disks are too bright on active mode. I really expected to prefer the preamp in passive mode, but I don't.

Cheers,

Matt