For home theatre? Well unless you mean 3 or 4 DACs, or a multi-channel DAC like the Apogee Rosetta 800, then the soundcard is the only way to go. You want multi-channel for home theatre as all movies these days are mixed for 5.1 or 6.1 channels.
That being the case, get an X-Fi. They do a stellar job. The Extreme Music will do just fine for what you want, though you could look at the Elite Pro if you want better sound and a remote control. Also, one of the few cards that can do full rate DVD-A playback (due to RIAA idiocy, you have to have a soundcard that can do hardware decryption to get full rate playback).
If you just don't like Creative or have to have something with better converters and electronics, look at a Delta 1010. Less flexable over all, and not good for games, but better sound. It'll work just fine, when combined with DVD playback software with proper decoders.
You CAN go the D/A route if you really want, but it'll be a pain andvery expensive. You'll either need a multi channel D/A or a soundcard with multiple digital outputs. You can't just hook up 3 USB DACs because those will appear as three seperate stereo devices in Windows and HT software wants to use one multi-channel device. So you need something that can gang the digital outputs together. An Echo Gina3G ($350) would work to a DAC that had ADAT in, like the Rosetta 800 ($2500). The Rosetta's own firewire addon ($350) might work too.
The other option is to take a digital out form the computer to a reciever, and have your computer just pass unmodified AC-3 and DTS streams and let the reciever deal with it. Of course with that method you get surround only for movies, games and such will all be stereo since S/PDIF uncompressed is 2 channel only.