Sony PS3 Optical Out to a DAC?


Does any one know if the Sony PS3 Optical Out on the rear panel is for an Audio stream. If so, can one purchase a decent quality DAC like the cambridge (sells for $495), use the PS3 as the transport mechanism feed the signal to the DAC and get a significantly better quality CD signal then an equivalent $495 DC player.
raya
Michelle_kim, "With the ps3 the biggest improvement for me was when I set the audio to 44.1khz. The default 48khz sounded pretty dead." Why is that?
I tried to hook up my PS3 to m y Wadia S7i glass cable and all I heard was a loud fluttering noise.
Talk2me - not sure what is causing the 48khz setting to sound so flat, but try it out. It's bad when I play any of my CD rips.

running it in 48khz mode allows you to use the OS while playing music though.