HiSound use Sigmatel SoC, likely either SMTP3770 or 3780 (same SoC has been used in lower end Sony and Fuze+). It doesn't support external DAC. On the other hand, C3 uses (probably) a RockChip SoC, which does support external DAC (as well as having internal DAC section). By SoC alone, RockChip really isn't that much better than Sigmatel. While the PCM1770 (a DAC, not a SoC) might be a better DAC than that inside SMTP series, the problem is. it is still a relatively lower end DAC. Given RockChip has a history of poor support on 24bit stuff, I have a feeling C3 might be limited to 16bit only. Another issue is PCM1770's relatively low output power, meaning ti will have a hard time on demanding load. Since the headphone section has been integrated into the DAC, there isn't much ColorFly can do either. My suspicious is, ColorFly picks this particular DAC to save cost - just a single chip and you save up more than half the DAC and amp section. On the other hand, SMTP does support line-out on the chip, and that's probably what HiSound feeds to the external amp section - and good reason why HiSound DAP generally seems much more powerful than DAP of same size.
Basically, by only looking at the design, both have their own compromises. HiSound opts for an easy-to-use SoC with integrated DAC, then put more effort on the amp section; while ColorFly picks an SoC that does support external DAC, but choose to use an all-in-one DAC+amp chip with relatively low power. These reflect in the design philosophy difference of the two companies: HiSound tends to tailor their DAP for the audiophile crowd while C3, as I know, is closer to a consumer level product in the ColorFly line-up.
As for the 'Rocco A' story - no, the market didn't get filled up by copycat. The internal design of RoCoo-A is very different from other look-alike players such as Gumstick and C30. That's a long story behinds it and I really don't want to go into it right now.
Anyway, rest assure X3 will use neither Sigmatel nor Rockchip as SoC.