Will getting a DAC converter improve mp3 playback


I am thinking of getting a DAC converter as I mainly use my computer for music. I have a collection of mp3 and wma (192 kb/s and 128 kb/s) and want to get most out of it. I was also thinking of getting the USB thingy from blue circle (http://www.goodsound.com/equipment/blue_circle_usb_thingee.htm) and then connecting my computer into a receiver using an optical out. I am a college student so money is tight, I hope to spend no more than $300 on whatever I do. What do you suggest. Which will sound better?
acura1947
The best approach would be to convert your files to CD quality 16bit /44. The cables I don't think will impact much, as optical can carry high rez 24/192, Digital Coax 24/96 and USB will carry CD quality 16/44.

Most nice DACs are 24 bit and up-sample. They are made for improving CD sound. I don't really know what the up-sampling does, if it smoothes out the signal or what.

For 300 bucks you can get a 120 giga byte i-pod and then upgrade all your music to CD quality. MP3 is low resolution, that is primary factor in low quality sound. You can find a better DAC and then upgrade to CD quality files and then should move you pretty far along.

Happy Listening.
I think you would notice a substantial increase in quality, even of your 128 kg/s mp3's, if you bypass the dac on your sound card and use a reasonably priced external DAC. I haven't heard the Blue Circle but it's from a well-regarded company and the strictly utilitarian design of it is appealing. I use a Valab DAC, available for $200 on ebay, between a MacBook Pro and a Nuforce Icon amp and it sounds quite a bit better than going analog from the MacBook to an amp. Even the internal DAC on the Icon is an improvement over the sound card in the laptop with mp3 files.

To Scottlanterman's suggestion about converting your music and using an iPod, you'd have to re-rip everything at higher resolution, not just convert your existing files, assuming you even have the high-res originals. In addition, unless you have a Wadia iPod dock with digital output, you'd be using the DAC and amp inside the iPod and that might not be much of an improvement over what you already have.
The newer iPods have much better DACs now, but Sfar is right, I use a Wadia 170i out to a Peachtree Nova. It sounds really good, but it is about a $1,500 set up and all my stuff is lossless CD quality rips on an old iPod.

That USB Thingee might just be the thing for you, it looks it is worth a try. I would still re-rip your favourite music lossless and do some comparisons to the low rez MP3 files to see if you get more enjoyment out of it.

A better long term investment might one of the Camebridge Dac Magics on sale for about $350 on the site. This is a well reviewed component that will hold its value and should do a very good good with whatever digital system you end up with.

Best of luck.