Need advice on how to dip a toe into digital

If you are looking to see if digital can sound as good as vinyl I think you will be disappointed if you only Budget a few hundred for a DaC. You have a nice system and a nice vinyl playback rig that might be near impossible to better with digital unless you are spending a lot on it. I don't think of digital as equal to analog just necessary since a lot of music is not available or very expensive on vinyl. I think you would be very impressed with a dac like the ps audio perfect wave II via USB from you laptop and running audirvana playback software. This would allow you to dip your toe into the world of high resolution audio and see what you think of that too. You could even add the transport if you want to play sacd. You have a great system and I think it deserves this level of digital otherwise you may just be disappointed and be one of the ones that thinks digital sucks.

For the longest time affordable digital simply didn't do it for me. I ripped my 850 CDs, argh, and bought the Logitech Touch, The convenience alone was enjoyable but the sound was still flat.

My next step was auditioning the affordable (under $1,000 DACs) a few years ago. YUK.

Thanks to this forum I purchased a Metrum Acoustics NOS Octave direct from the manufacture for just over $600. This DAC finally produced acceptable sonics and I'm still on the cheap.

Today the affordable DAC selection has grown a great deal sonically. Because of my limited experience I have no actual suggestions. I'm confident you'll be able to put together a listenable digital source without going nuts.

Bifwynne Given a motivation of curiosity (can digital sound any better than vinyl or redbook), I doubt you will end up concluding the answer is yes -- particularly in the case of vinyl. But one thing I am more sure of is this: anybody into Audio Research gear is not likely to become sufficiently informed to answer that question by fooling around with low end digital-to-analog converters. If that’s the investigational strategy you follow, the answer you come up with is going to be no, and my suggestion is don’t even waste your time. Not that I am suggesting going out and spending a lot of money, I’m not because my guess is that ultimately you “will not pursue.”

It seems to me the more rational approach for someone using ARC would be to investigate getting your hands on a higher quality DAC than some of those already mentioned (think $1000+ for new). Just make sure that if you buy new, you can use it on a 15-30 day trial basis with a no questions asked ability to return. I suspect you could do this either through The Cable Company or perhaps directly with some of the manufacturers. Alternatively, you could pick up a used, well regarded DAC that can be resold for minimal financial loss. Whatever DAC you try, its specs should indicate input/processing support for at least 96 kHz/24 bit hi-rez audio files and preferably for 192 kHz/24 bit files.

Before settling on any DAC, confirm that it can be connected (and how) both to your laptop PC on the one end and to your ARC gear on the other end. Also, you want to be sure that whatever equipment and connections are used that you’ll be able to use software on your laptop to control the playback through your Paradigms.

Regarding playback software, my suggestion is to obtain JRiver software for your laptop (free during a 30 day trial period and $50 if you want to keep it after that), and do any listening tests using either the WAV or FLAC audio file format. JRiver is designed for Windows computers (which is what I assume you have based on your original post) whereas iTunes software and the ALAC file format are more appropriate for Apple computers and devices.

My last recommendation is to do your testing using hi-rez audio files (WAV or FLAC) obtained from HD Tracks. In theory, it is more likely that you would hear a difference in sound quality by listening to 96 kHz/24 bit (or higher) hi-rez audio files than any audio files that you would “rip” from one of your redbook CDs (which would be 44.1 kHz/16 bit files). Also, in order to compare intelligently, make sure to download something from HD Tracks that you can also play via physical media whether vinyl and/or CD.

Even if you conclude that digital audio isn’t for you, you’ll have some fun exploring the possibility.

On the subject of SACD I can't comment on sound quality comparison with vinyl. I do think SACD can sound better than redbook and usually does, but I don't think that's universal. In any case, as more and more hi-rez downloads become available, it looks like SACD is becoming less and less relevant. In addition, there are audiophile redbook production methods out there (witness xrcd and the like) which to my ears can equal and may even surpass SACD sound quality. Your current player will play them just fine. Their downside is that at $30-$40 per disc they often cost more than SACDs which are high to begin with. In any event, I'd think twice before going down the SACD route at this stage of the game but, if you do then the Oppo 105 is a sensible way to go. Spending thousands on another audiophile player just to be able to play SACDs strikes me as a solution in search of a problem.

I have been using hi res files and computer since May 2010, I've experimented with quite a bit. Considering you own a PC, I agree with Gz3827 completely.... I might suggest Foobar 2000 instead of JRiver, JRiver is good, easier to use than Foobar, but once properly set up and updated to the latest software, Foobar sounds as good as JRiver.... If you don't mind spending the $50 or so, just get JRiver.
If you are not an apple head and you have enough hard drive, I'd use WAV files period, if space is a premium, then I'd look at FLAC. There are several under $500 USB DAC's that are very good...
The newest version of the Schiit BiFrost w/USB, one of the very latest Audio-Gd DAC's are excellent for the money.
Both have Asynchronous USB, at least 24/192 file capability and sound quite good for the budget.
I hope this helps,
Tim