Resampling has negligible effects on sound quality in that scenario (res. to a higher sampling rate) and you don't really have a choice.
Your dac may support 24/96, but not 24/88.2 which is why it's complaining. DirectSound wouldn't complain because it just resamples automatically (to whatever is configured as playback format in Windows, the default is 24/48, iirc).
Resampling may have harmful effects on the sound quality, depending on the implementation of the resampling algorithm. We've seen some pretty lousy resampling implementations that can add TONS of strange artifacts and spurious tones into the audio.
Just givin you a heads up!