I have read much of discussion going on here. Here is my opinion
-A CDP or a media player is a very important part of your setup. It may screw up your good gear. You must have a good budget for it. IMO you sould go for anyone of them depending on your collection-CDs or FLACs.
-An average player would need a DAC.
I personally bought a Squeezebox Touch. It may seem expensive but its well worth. Its DAC is a very good one. You wont need a DAC.
Other contender was Sonos but it lot to it because of several reasons. The lowest model would cost you more than twice tha of touch, assuming that you buy the controller, else you wont get a diplay to navigate your files. Touch supports USB! Its the only one. No sonos and no other Logitech model supports USB. Plug in a HDD and forget everything. Tuner, a nice display and networking capabilities are obvious features.
Other players are mostly AV players and dnt have a good DAC. This one is a featureful item. Just go to one of its forums. People swear by it.