There have been a few threads on this around here over the past year, so you might find some good info by doing a quick search. I'll try to give some ideas here, though:
1. In my experience, sound cards have always beat onboard audio when it comes to analog outputs. I can't speak for digital.
2. The only downside to using the digital audio output on a computer that I can think of is that receivers can't handle some of the gaming audio codecs (I might be saying that wrong). However, it seems like you just want to listen to music, so digital would be fine for that.
3. For wireless, you have a number of options. One that comes to mind for optical digital audio are the Apple AirPort Express units. If your Dell already has a wireless transmitter, then you'd just need one of them.
4. I don't know if you would tell any difference between the digital audio versus analog audio if you got yourself a good soundcard.
Does your Dell have any audio outputs right now?
Adam