The NHT Xd processor only takes analog inputs, so it doesn't matter if you're system is all digital or not (unless you upgrade to one of the DEQX processors with digital inputs. You'd also need to add 4 channels of amplification for that upgrade).
Not having heard the Xds with anything but the stock electronics, I can't say if the additional A/D->D/A causes a problem, but I don't think it's ever gotten in the way of my enjoyment of these speakers.
Not having heard the Xds with anything but the stock electronics, I can't say if the additional A/D->D/A causes a problem, but I don't think it's ever gotten in the way of my enjoyment of these speakers.