Judging from the circuit diagrams, the pre-gain is just another signal attenuation stage just past the volume pot.
Based on that I'd be very surprised if it had any other effect than adjusting the usable volume pot range.
That's correct: asio4all makes sense in the best case if your player does not support any bit perfect connections, but otherwise is just an unnecessary complexity and latency to deal with. Chord drivers support native ASIO so there's no need to use asio4all in that case.
If you look for a similar sound signature to the 308s then the natural choice would be LSR305s.
They fit your budget (you can get a pair around $300) and a lot of people are very happy with these.
Hissing may still be there but if memory serves they are somewhat quieter than the 308s.
The definite plus is they will be a plug and play solution and no surprises with different connectors etc.
Correct on the "padding".
Regarding what impact does it have on the DAC's working temperature, RF emissions or other side effects - I would expect that the 24-bit DACs do the "padding" internally on 16-bit streams just to have one uniform way of processing. So in the end exactly the same stream would be converted whether you send a 16-bit stream or padded to 24-bit.
Possible that switching between 16 and 24 on the fly has some side effects, or it's simply a design choice that could have been different, but evidently considered no big deal. If you're really curious why then check at the hydrogen audio where the f2k developers hang out. In practice if your DAC supports 24-bit then set it to 24, otherwise 16. No adverse effects with playing 16-bit files through 24-bit interface.
Both have plenty of bass but to me the thx00 sounds more balanced and less artificial. Plus you get the wooden cups which give it a more premium look.
The best thing of course is to listen to both and make that call yourself.
With balanced cables the difference they make is even less than with SE. Really not worth spending a lot on these, and $30 generic cables are all that is needed. The Violectric ones are probably at the top end of what makes sense. Good call @mulder01 !
You want pre-fader to get the fixed level signal. All you need for that is press a few buttons, as described in the manual.Mucking around the dip switches shouldn't be necessary unless the signal will be too strong or too weak for the XMC-1. Try it first as is.