Ben,
With Pandora on my Ipod, I use the coaxial output on the Wadia to my D/A converter and it sounds great. By the way, the Wadia does not have an optical out. I hope this helps. It sounds based on some of your questions you may not have purchased one yet. For the price, I think the Wadia is a great product. However, the Wadia is sensitive, it requires high quality cables to get the most out of it. You can read through this to see.
Rpg