I have the X-Fi Extreme Music version, with the I/O drive bay thing. I have tested the difference between using the line-out on the X-Fi to one of my amps, vs. the optical/coaxial output to my Zero, then Zero out to one of my amps. The Zero wins big time!! The DAC goods on the X-Fi just aren't that good for music, but the X-Fi makes a good Optical/Coaxial out.
I wouldn't recommend modifying your X-Fi either. Once it is done, it is done and games will not necessarily benefit from it.