If you're using it as a dac/amp, then yes, there is much better. However, the way I'm using it, I have it so it sends Dolby Headphone digitally to a real dac and a real amp. This will make the U3 as good as you want it to be, because you're not using anything except the Dolby headphone encoder. You can't make 0's and 1's sound better or worse. As long as the signal is good, the DAC and AMP will be the ones doing the work, not the U3. So the U3 is priceless, because it's cheap as hell, and allows you to use your own good stuff. Getting a better dolby headphone device is moot, unless you plan on using the internal dac/amp.
I just bought the AKG 701, so might need to look into amping these in the future. For now the question is do I keep the u3 and use it as a headphone out for the 701 (with dolby headphone), and get an amp down the line and use with optical DAC (but won't work on mac as can't use u3's optical out, only analogue output or macbook pro's built in optical/analogue out), or upgrade to the u7 now and that might have a better inbuilt amp/dac? Doesn't have DH though, it has something else- dolby home theatre, apparantly it's not as good