The original X5 is very close to be completely transparent and neutral. As far as my personal taste goes, that's probably closest to my own liking. But as far as overall SQ goes, it is pretty much on par with X5II (and thus not quite as good as X5III). When moving from X5 to X5II, FiiO made the choice to retune the sound to go from very clean and transparent to very slightly warm - I presume it is an response to their Chinese customer who keep complaining the X5 for sounding too 'tap water' ( = 'without any taste'). The majority of Chinese audiophiles community, unlike the international audiophiles community, tend to prefer everything with a warmish tone. That's the sound FiiO eventually settles on.
Dunno about AK70, but there is just no comparison between X1 and X5III - they are not even on the same class.
The PC's USB driver for X5II has not been released yet, so there is no way to test it for now.
I can confirm this. I streamed some music from my PC last night to X5III and they work just fine.
OTG storage works fine, it is an Android device after all. Not encouraging you in anyway, but this works just as well:
Input? X5III can take USB-in and acts as a external soundcard for PC, but that's about it. It has however USB-OTG for DAC and coax-out, which you can connect to an external DAC/amp.
The Bluetooth on X5II supports aptX, which is almost lossless in quality. It isn't perfect yet, but if you are in situation when BT headphone is your only choice, having the option on X5III is better than none. You will have less loss in SQ over aptX than you are ripping music into 256kbps mp3. Besides, you can stream to wireless speaker or car stereo as well. Those are situation you don't need the best possible SQ but more for convenience. Also BT can have enough bandwidth for completely lossless music stream as well - Sony LDAC (which unfortunately Sony doesn't seem to want to license to anyone else) and the next generation of aptX will be able to do it, especially since BT5 is already on the horizon.