Computer volume vs preamp question

Well, when you feed CD music to your DAC it goes in 16 bit "words" 44100 times per second. Those 16 bits define dynamics from "silence" to loudest signal.

When you lower the volume in MediaMonkey, you actually alter the data in those 16 bits and proportionally lower them. Lowered they go from "silence" (which remains the same) to "new loudest signal" which is now lower and, depending on attenuation, may require less bits to present lowered dynamics. Even though you still are feeding your DAC with 16 bit "words" 44100 times per second, you are practically compressing the dynamic range of your music.

With preamp the dynamic range of your music remain untouched (100%, "bit perfect") and, depending on the quality of your preamp, you can listen at very low levels and still experience the dynamic "slam" of your music.

Hope this helped Tim. Don't know to explain it better.

Well, IMO, attenuation is, in majority of nowadays cases, still implemented better in analogue domain, so yes - it probably is worse. But I'd say the question would be - does it sound perceivably worse? The answer to this is dependent on the quality of the system IMO.

Sad to hear you let your Phoenix go.

For best results, try using dithering -- you may go with foobar2000, it provides dithering as an option. Foobar controlled volume (with dithering!) sounds much better than any analogue volume control (from Audio-GD) I ever heard.

Well if your question was about stepped attenuators/relay networks against classic analogue pots - the answer is in general in favour of stepped attenuators/relay-resistor networks. So in general - yes, "electronic" volume controls are better... but, as always, it depends on actual implementation.