After 1 week with the Squeezebox Touch I would absolutely recommend it to anyone looking to get into computer audio.
As a reference I have a Mac Mini with PureMusic, a Windows 7 machine with Foobar, JRiver and have used just about every software available for Windows machines, and two Linux machines with various music software installed. For a detailed description of each just visit my site below.
Out of the box the Touch was on the thick/warm side of neutral. I used Soundchecks mods which took all of 5 minutes to complete and the sound became very detailed and open....much like Music Player Daemon on my dedicated Linux machine which has been tweaked out. The SB-Touch uses an embedded Linux OS and can be tweaked much like other Linux machines. I would say the sound is very much like Music Player Daemon except that the bass is actually fuller and more pronounced. Even with the stock power supply the sound is top notch, detailed and very musical. The only disadvantage I see with the Touch is that you will need a dedicated server running [somewhere] with your music. In my case I just used the same NAS hard drive that my Linux machine was using.
I have used the coax out as well as the toslink and both are equally as good going into my Audio-GD Ref5 dac. For those who still wish to tweak and refine the sound there is always the option to upgrade the powersupply, internal clock, place a 75ohm resister on the coax etc. But for $300 its a no brainer, very easy to use, very easy to configure, small, silent, and sounds great. Probably for most people it will end their search and desire to find a suitable front end for computer audio.