Music_Man,
The debate between XLR (balanced) transmission vs. coax transmission is completely seperate from AES vs. SPDIF. AES and SPDIF formats are not mutually exclusive to XLR, coax, etc. AES can run on unbalanced coax, balanced XLR, optical, etc, and SPDIF can also run on all these mediums (however, it is rare to see SPDIF on (XLR) balanced).
AES and SPDIF have no inherent sonic differences. They only differ by their metadata and binary voltages. Metadata are status bits which describe the nature of the the data (consumer vs. profession, copy protection on vs. off, etc). The binary voltages can have an affect on the sound if your running a long line. The difference in sound will be obvious (data drop out, clicks, pops etc). It won't be a 'coloration' difference. AES runs at 4V logic and SPDIF runs at 0.5-1V logic. For this reason, AES is advantageous.
Coax (unbalanced) is advantageous over balanced transmission for two main reasons:
1. Balanced cables has much higher capacitance and higher impedance which will round-off digital transitions (aka jitter).
2. Coax has better shielding to protect from EMI
The only reason balanced transmission exists is because the Audio Engineeing Society wanted to create a digital transmission standard using common cabling (XLR). At first, it didn't work so well because certain lengths of cable would cause perfect reflections/cancellations because of improper cable type and termination.
With all that being said, it should be noted that no matter what type of interconnect used (and no matter how expensive the cable is), the amount of clock jitter inherent in digital interconnecting is WAY too high by orders-of-magnitude for any converter chip. Without a properly designed clock recovery system, even a $30,000 cable can't save the audio!!
Thanks,
Elias