"Hardware mode bypassing the digital volume control" is just a nice marketing cover for the fact RWA do not have access to the firmware and modify it to control volume via the wm8741 and the stock firmware is for the wm8740. Vinnie had even openly invite firmware modders like listrds to see if they can get the firmware to work with the 8741 for volume control.
According to Wadia, the 121 has no volume-control bypass and no need for one. Digital inputs are upsampled to 32-bit/1.4MHz, then processed with Wadia's proprietary DigiMaster interpolation filtering algorithm, which, they claim, maintains resolution at all volume settings. Sure enough, I could hear no difference between using the 121 as a preamp or through another preamp, at any volume level. In the latter case, I'd just max out the volume and go. Source; http://www.stereophile.com/content/wadia-121decoding-computer-da-processor
So the upsampling is an internal process to provide accuracy to the digital volume.
Digital volumen control is a nice feature but I know that it would be very expensive for a portable high end player without compromises.
Edited by fermelom - 10/26/13 at 2:10pm