I2S is definitely the way to go; just cut the crap and leave out the digital receievers and SPDIF / Optical cables. There's a lot of information out there about it, and in general, SPDIF and optical just induces a lot of jitter. If you think about it, SPDIF is a horrible idea (from an audiophile perspective) because you're sending three information streams through one, unified interface through a cable, and then you unpackage it with the digital receiver. It's just difficult to get better results than that of direct I2S. Optical is the same way, only worse. There's lots of stuff about it in the diyAudio forums, such as here:
It's definately worth while to wire in an I2S DAC, it's simple, less crap in the digital path, less possibility for things to go wrong, and it's pretty cheap.
It doesn't get much better than that. CD transports all the way!
~Tom