Njs,
I'm with you on finding the Squeezeboxes to be inferior transports to cd players. I felt my stock Touch was bested by a modest Philips 963SA I had on hand feeding my Minimax DAC.
That said, I have since thrown a regulated PSU (Bolder modified elpac) and had the Bolder digital mods done to my Touch and it blows the 963SA out of the water as a transport. Feeding my Minimax its the best digital I've heard and at a bargain basement price.
The bargain basement price part may be going away soon though as I'm tempted by Bolder's upcoming EE DAC mods which will probably be pretty darn spendy....