usb, spdif, or usb to spdif converter

Generally, a usb-to-spdif converter is good for two scenarios:

1. you have a really bad usb source (like a computer or, especially, a laptop) where there is a not of noise, power supply is not good or the source usb transmit clock is not good.  If you have a computer, you can get an excellent usb card with TCXO or OCXO click such as the Jcat or Pink Faun.

2. Your DAC has a very poor usb receiver board.  This can mean the usb receiver chip architecure is poor or if the usb-to-i2s module doesn't have a good clock or power supply line.

If you have a good transport/source and a good DAC with a really good USB, then you generally don't need a usb-to-spdif converter.  That being said, I generally like the sound of SPDIF, especially when I can use high end AES/EBU cables on source and dac.  The engineers from Pink Faun (who make USB, SPDIF and I2S computer cards) have the opinion that usb audio does not sound as good as spdif audio.  However, you need a really good SPDIF source and cable to reveal this.

In some situations, a usb-to-spdif converter with an extremely high end clock and power supply can be better than what you have.  These are products such as the Innous Pheonix reclocker or the Audio-GD DI-20 audio interfaces.  The Singxer SU-6 is okay, but there are some DACS that actually have a better usb-to-i2s module.

It depends. One way to look at it is:  If your DAC is better than your source then USB. Otherwise SP/DIF. The USB is retimed by the DAC, the SP/DIF, AES is not. But basically you have to try both. 
 

Never convert anything.

The USB interface is a data packet interface. Granted, you can improve music quality if you put in a better usb transmitter/source device. However, the receiving dac is going to have to un-wrap that usb data packet to get the actualy music file data (such as 16/44.1 or 24/96, etc.). Then it has to generate the individual channel pulses at the exact clock timing (such as 44.1khz). It outputs this on two i2s data lines that feed directly into the DAC chip. That is why I talk about the quality of the USB-to-I2S module in the DAC. If you have a really good one, then the USB input can be used.

When you use S/PDIF, the DAC has to unwrap this into two separate i2s data streams (for the dac chip). However, the pulses are pretty much already there and are being sent with the actual clock timing required (i.e. 44.1kz or 96khz, etc.), so no re-clocking /re-generating has to be done by the DAC when compared to USB input.

These high end usb-to-spdif converters are a very high end version of the "USB-to-I2S" module in the dac. This can be a significant improvement over using the DAC USB input.

Never convert anything.

Converting USB to i2s works for me.

Many thanks and hope you all had a wonderful Thanksgiving.  I am running a windows 7 desktop computer (a 12 year old gateway) usb output to an idsd micro dac for both music and blu ray movies.  I would rather use a stand alone player.  However, when I compared the computer sound (usb to the usb input of the dac) to the player's sound (coax to the same dac - using a newer sony blu ray player) the computer's sound was MUCH better in every way.  Any thoughts on getting equivalent sound via coax from a player would be appreciated.