IMHO, the USB implementation on the DL III is not great. I had to buy a Vlink to get close to my Denon transport in sound quality when using my laptop as a transport. With the proper PC software I was able to best the Denon-DL III sound quality. All that said, my system still sounds really bright to my ears. Haven't solved it yet.
I am not able to hear a sound improvement between audio formats, I think this is dependant upon the system, but it is a cheap tweak to try. I also cannot hear a difference between glass toslink and digital coax, maybe it is my hearing!