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Neither rig sounds better than the other to me, which is surprising, given that the iMac G5 does not have a discrete sound card (only the integrated on-board audio).
Enter the E-MU 0404 USB, with its high quality DAC. I've tried it with both of the above rigs. I noticed a larger improvement in SQ going from Rig #1 to 0404, than from Rig #2 to 0404. This speaks well for whatever sound chip is in the iMac G5.
My point (purely from my own experience, and knowing nothing about the chips) is not that the iMac's onboard sound is better, just that it holds its own... I would say it is comparable to the audio coming out of most store-bought and online-ordered PCs, even when they are equipped with Soundblaster cards.