Don't get me wrong... the sound from your PC to the A5's would be very good... but not nearly as good as it
could sound. Because of the nature of the inside of the PC - fans, hard disks, as well as the powersupply itself - it's a very electrically 'noisy' environment. You've probably already heard this to some extent even if you've just used halfway decent headphones. Sometimes you can hear a whine when the hard drive is working hard, or even when there is a lot of network activity. I can even hear conversations my neighbor has on his wireless phones on occasion!
In any case, I wouldn't consider the A5's by themselves a total waste without an external DAC... but they may be good enough that you can hear all of the stuff going on in the PC even better - and that could get frustrating.
As far as the cables, etc... the speakers will come with pretty much everything you could want. The two important ones will be the 1/8" to 1/8" patch (for going from iPod,etc.. or PC if you do not get an external DAC) and the RCA to 1/8" patch if you do decide to get an external DAC. The only thing you would need would be a set of interconnects to connect the RCA outs on the DAC to the RCA side of that cable (since the A5's only have 1/8" inputs - it's basically just a converter). If you look on page 3 of the
setup guide you can see what comes with them - and in subsequent pages what the different configurations you might want will look like.
It should work fine, however - especially in cheaper cables (which work just fine, or should) sometimes the connectors are bad - or the connections are weak. You can easily find a good 1/8" male to RCA male cable that will eliminate a redundant connection - which might not make a difference, but it might if there is a poor connection with the adapter.
The really nice thing is that audioengine has a 30-day return period... so you can easily try them out and return them if you really don't like them for some reason. You can also try them out before you worry about getting a USB DAC - after all... you might decide that you don't mind it that way. And you can always upgrade to the DAC down the road for even better sound!
As far as encoding, it all basically comes down to the source. If it is a lossless rip from a CD - then anything more than 16bit/44kHz will be upsampled... which isn't a bad thing necessarily (although opinions differ on this) but it started out at that resolution and it can't get better for the most part. You can google about sampling rates and spend about 1000 hours reading about it if you're so inclined. If the source was from DVD-A then it's possible to be as high as 24bit/192kHz - although I'm personally unaware of whether or not any actually exist. By far the most common high-res files (and they're
not very common) are 24/96 FLAC files. Technically FLAC is capable of any bit rate between 4bit and 32bit and any sampling rate between 1hz and 650kHz - but nothing exists outside of the most common source standards.
There are simple and complex reasons for all of this - but the short answer is that you can only get a file a good as it was originally sampled for the most part - i.e. during the ADC phase... and having anything greater at the DAC phase will not significantly improve the sound. There are exceptions to this (of course) but in general that's the rule. In any case, all DAC's will at least be 16/44kHz - which is CD quality - and many will be 24/96 or 24/192 capable which is DVD/BD/HD FLAC quality. For an idea of downloadable 24/96 files look
here or
here.
In most cases, to be totally honest, you won't be able to hear the difference between versions - but I'm just giving you all the details so you can make your own determination. In fact at the second link you can download some free high-res files to try out - but if you don't have a DAC capable of the sampling rate and bit depth... then you won't even be able to play them so don't do that unless you decide you do want to get a USB DAC.
