Ok, I had a few Best Buy gift cards burning a whole in my pocket so I decided to find out for myself. I haven't tried out all of my music, but so far after a few hours I am really enjoying this thing. I primarily listen to classical music, some of which is of dubious recording quality. The Xmod makes this type of music sound incredible. For some other music genre’s, the algorithm in this unit appears to be heavy on the low end, but I did not notice this in my symphony type music, only in some oldies that I had. For my music that was of excellent quality and that I encoded in a lossless format, it was hard to detect a difference in sound quality, but the 3D algorithm does seem to help in improving the soundstage. This may be a personal preference.
Where this thing seemed to really shine was in some MP3s that I had dubbed off of cassette tapes. I had dubbed these for a relative's funeral video that I had to create (a slide show thing set to music). I had these MP3s still on my laptop, and when I listened to them with this device it sounded incredible.
Anyway, to answer my own question that I had raised in this post, this thing is not much of an amplifier. To me it seems to be a D/A converter with some advanced soundstage algorithms. I still had to have my trusty headphone amp at the output of this to drive my cans.
My rig was this: An Apple Macbook with USB out to the Creative Xmod, the headphone out port to my PA2v2 amp, and this out to my Sennheiser HD580 headphones.