Here is my trial experience with Android tablet as media player.
I have a Pantech Element tablet and the android version is 4.0.4. The tablet does have Micro-HDMI out. So I got a Micro HDMI to HDMI cable and hooked the tablet to my AVR. Did the usual input settings like Trinnov equalization position, what eq curve I want to deploy etc. No special setting on android (infact I did not find any HDMI related setting in the tablet) so its simply plug and play.
First I tried with my daughter's MP3 music and it played through normal google music player. It was sounding just like a compressed music, nothing fancy.
I have all my flac's stored on separate Windows machine which I use as NAS box. I mounted this as samba network drive in ES Explorer. Clicked on a FLAC file and got the usual player choice. By the way, FLAC is natively supported in android, so tablet does offer hardware player support. I chose moboplayer and it started playing with hardware support. Nice clean output, just like a CD player used as a transport.
Now, there is a caveat. Android has a mixer too and we definitely don't want to use it. Whenever the mixer is into equation, android switches to software decoding and then adds all the sounds together. This messes up with signal and causes all that background noise with extra cpu processing. To avoid this, I had to make sure there is no background music player running. Usually, these are the players which will keep playing music in the background while you work in other apps, like google music player, Pandora etc. When I had google music player in the background, Moboplayer will only do software play and not hardware. After I killed Google Player and restarted Moboplayer, it automatically switched into hardware mode and no more click or touch noise in the audio.
So, just to sum up, a very simple setup to play the music from Android. As for whether it's just like an expensive digital transport or not, I don't have golden ears (lucky me!) and I can't detect difference. I would leave it to individuals whether they like this setup or not. It works for me and I think I will keep using it. Or one of those days, I will get a dedicated android tablet and mount it in the cabinet for usual navigation/view/playback/control other devices etc.
Thanks Santy for discovering this and showing the path. Heck I didn't even knew that my tablet had HDMI out.