I have two Airport Expresses. One upstairs in the den, one downstairs in my living room.
Downstairs I have my Airport Express connected to my HiFi via an optical lead to my old Sony MiniDisc player. I haven't played MiniDiscs in ages, but it makes a damn fine multi-input/output D-A/A-D converter. It definitely improves the sound of the Airport Express (and my TV, and my DVD player, and comes in handy for ripping Vinyl and Compact Cassette to iTunes). However, if I want to give my ears a proper treat, I just slap on a CD or some vinyl.
Upstairs, I have been connecting my MBP and Airport Express to my other (much cheaper) Hi-Fi the old-fashioned analogue way. However, today I ordered a cheap outboard DAC. The main reason is that for some reason the Airport Express in that room (and also my MBP for that matter) picks up a great deal of interference hiss and hum, and this DAC is basically a last resort to eradicate that. The Hi-Fi in that room is so old and cheap it probably wouldn't otherwise recognise any improved sound quality.
Anyway, it's a Beresford TC-7510 Mk 6. I've heard mixed reviews, but for the price (£100) I thought "what the heck", as it has a good selection of inputs and outputs.
I'll let you know once I've played with it for a few days.
SL