Hard Drive based system

From what I've read the Waveterminal is hard to come by now, if not completely discontinued. So what are some other high quality USB to SPDIF converters for Mac/iTunes? I don't need anything fancy, just a USB in and a coax out.

Morbius is correct, if the master clock is local to the DAC chip itself, then the jitter will be minimized. This is not necessarily the case with external "bit clocks" that a few DAC's and CD players utilize. This is often more difficult than it seems at first blush. The master clock must generate several clocks or at least a very high-frequency clock from DAC to transport. Some of the transport chips may use the higher frequency clock, such as 16.9344 MHz. The analogy to the disk-based system doesn't hold water though, IMO.

Audioengr can probably tell you whether it is okay to go with Transit (optical out only) as a starter unit or that you have to use one of his mods to obtain acceptable quality.

Have you decided on the DAC? If you end up with a DAC with USB input (e.g. mini DAC, Grace 902), you may not need the converter at all. However, you do have more options with a converter.

Haven't decided on a DAC yet, but I was wondering if any had USB inputs.

Any recommendations (with or without USB in) for under $1000?

I mentioned two USB DACs in the previous post. Some people like the Apogee mini DAC better than the popular Benchmark DAC1 which I use and surely recommend.

I noticed that you mentioned Sony player in another thread. If you get it modded by TRL, it will be hard to find an affordable DAC to beat it, hard drive system or not.