Thanks for clarifying your experience with the X-fi, and I honestly, I agree with you up to a certain point about the relative stability of a digital signal.
I do buy my HDMI cables from monoprice, but I tend to throw down for the $15 shielded cable rather than the $3 "equivalent," so as to avoid the minor risk of interference, and also to alleviate compatibility issues that seem somewhat prevalent in and among the lowest quality digital cables.
However, my understanding of digital audio is that impedance matching between the cables and connectors does actually matter in ensuring that your 1's and 0's are passed along to your DAC in a timely and accurate fashion. Consider the following excerpt from (
UltimateAVmag.com: The Great Audio Cable Debate), the final paragraph being the most relevant ::
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Electrical Factors
Everyone agrees there are several electrical factors that clearly affect the aural performance of audio cables. For example, all conductors (except superconductors) exhibit electrical resistance, which is called impedance in the presence of an alternating current such as an audio signal. Resistance to DC current is measured in ohms per foot; the longer the cable, the higher the DC resistance. However, the size of the conductor must also be considered; the larger the diameter of the wire, the lower the DC resistance. AC impedance is also measured in ohms, but it is independent of length.
DC resistance is important only in speaker wire. According to Marc Dimmitt, former technical support manager for Clark Wire and Cable, "If you run a small-gauge wire 100 feet from a power amp to a subwoofer, you're just going to burn up the wire. Most of that energy is going to dissipate as heat; it's not going to make it to the voice coil and move the speaker cone back and forth. This tends to compress the dynamic range of the sound as well."
DC resistance is important only in speaker wire. According to Marc Dimmitt, former technical support manager for Clark Wire and Cable, "If you run a small-gauge wire 100 feet from a power amp to a subwoofer, you're just going to burn up the wire. Most of that energy is going to dissipate as heat; it's not going to make it to the voice coil and move the speaker cone back and forth. This tends to compress the dynamic range of the sound as well."
AC impedance is important mostly for electrical digital audio cables. (Of course, none of this discussion is relevant for optical digital audio cables.) Unlike analog audio, digital audio signals are sent at frequencies in the megahertz range. This requires a cable that exhibits a very specific AC impedance: S/PDIF requires an impedance of 75Ω:, while AES/EBU requires 110Ω.
[Paragraph on mic inputs omitted.]
One problem to overcome in digital cables is return loss. According to Bruce Jackson, former vice president at Apogee Electronics, "If the cable and connectors are mismatched in terms of impedance, the digital pulses bounce back and forth, interacting with each other, which causes them to distort. When you have it all correctly impedance-matched, you don't get reflections."
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Ultimately, I'm not talking about buying an exotic cable here. The point is that the impedance matched 1/8 BJC Canare adapter is only $5, amounting to a total cost of $26 for a 10 foot 75Ω good quality cable. I imagine my costs out the door at Radioshack would be right in the same ballpark.
If I needed a digital input, I'll grant you that the 1/8 to stereo rca would be a handy interconnect to use, but for my purposes, and at roughly the same cost, I believe my solution increases the probability that my DAC will be receiving a bit perfect digital signal.
If you wholly reject the underlying concepts in the article quoted above, I suppose you and I will just have to agree to disagree about the relative merits of alternatives to the creative I/O module.