balanced vs unbalanced output

The primary benefit of balanced connections is reduced noise. Correct balance cancels any noise riding along with the signal.

Sometimes, depending on the circuit, you may also get higher gain.

Sound quality with this lower noise floor you get better detail retrieval which helps soundstaging to.

BUT !! Balanced doesn't always equal better sound. It depends on the equipment, the circuit design, etc etc...don't assume balanced is better. It's not black and white...

Also be aware that not all equipment with an XLR connector has true balanced circuitry. That should be verified with manufacturer

As an added note, balanced interconnections are more commonly used in professional environments. The reason is that equipment is located all over the place and you might have a long run of wiring, say a 75' microphone cable. A unbalanced cable of this length would be much more subject to noise pickup. A true balanced circuit has a high "common mode rejection ratio" that makes it much quieter with long cable runs or in a noisy EMI environment.

Most home systems don't have these problems to the same extent so the primary advantage of a balanced mode isn't as big an issue. That is not to say you will not hear a difference between the two connections. However, it could turn out that you might prefer the unbalanced connection. The only way to find out is to try your setup both ways.

If you currently don't have equipment that offers a balanced connection it is not something I'd lose any sleep over if you like the way your system sounds.

Assuming a differental input on the receiving end, balanced is a superior choice and there is no technical reason to not take advantage of it.

There are those who might argue a bit with that statement. A differential circuit, by definition, is more complex than an unbalanced one. Some designers believe simplicity and a reduced parts count benefits their design sonically. They would argue that a balanced circuit helps with a specific type of noise issue, and, if your equipment is not going to be used in an environment which has that problem, why complicate the circuit?

I've got a Lavry DA-10 DAC with balanced outputs. I recently switched from an amp with balanced inputs (which I was using) to a different amp that only has unbalanced inputs. It made zero difference in the background noise. With either amp I could put my ear directly to a speaker and hear no noise. Specification-wise the old amp had a 20% better S/N ratio but there is no audible noise difference between them in use.

That is a good example of a home situation where the balanced/unbalanced issue is irrelevant in contrast to other attributes.