i.e. use the minijack to a pair of RCA jacks from a pc card, etc...
This actually isn't that bad of a solution for stereo or multichannel. It really depends more on your audio hardware.
In PC, or USB sound card? In past, internal cards always suffered from much more noise. but better cards now claim sheilding, etc.
USB sound hardware will never have as much bandwidth to work with as a PCIe or PCI soundcard. This bandwidth is very important for hardware-to-software interfacing. There
are audiophile-grade sound cards. They have amazing noise rejection (they don't need shielding because of their noise-rejection electronics, but the Asus brand cards and newer SoundBlaster cards have it as a bonus). Unfortunately, the software is not very stable - mediocre at best for all the higher-end sound cards, but it is what it is. Auzentech (X-Fi based) and Asus make mainstream audiophile grade cards, and Creative Labs X-Fi is only a slight step below. I have heard only terrible things about Asus's software, and a bit better for the other two.
Digital "RCA" or optical? I've seen lots on conflicting info on with to us - I get the sense it really doesn't matter - and can be based on what you sound card puts out. My run, for what it's worth, is about 40 feet between PC and amp.
40 feet is quite a bit, but I would still consider the difference to be minimal. Obviously the optical cable is immune to EMI from things the cable is run past, but the coaxial RCA cable is well shielded, so I doubt it would matter. I use optical because I had the cable and interference immunity can't be bad.
There are now a few HDMI sound cards to choose from as well that will output 1080p video (though a graphics card interface), DD-TrueHD, and DTS-MA. Unfortunately their poor software support makes them nearly unusable at this time. I am waiting for this technology to mature.
OR LAN Cat 5 connection to another "box" like a appleTV, etc. I was planning to control my music organivation app *( itunes with lossless AAC encoding) with am I-phone - it has a built in wireless connection to the computer. ~But the down side is that I'd have to always have one of our iphones near by, unless I walked to the computer. Does anyone have experience and/or recommendations on one of the set-top music streamers?
I personally prefer your other options. I would rather have a fully functional PC that you can customize completely than one of these "user-friendly" (i.e. less features and flexibility) satellite boxes. I use a Logitech DiNovo Mini bluetooth keyboard and can do anything I want, though my PC is also hooked to my TV, so I can see what is going on.
EDIT: Windows XP has what I believe to be a better audio subsystem. I HATE Vista because they "improved the audio stack" which means they took features away that allow you to output analog and digital at the same time. I don't know what they did to the audio quality by changing it (probably nothing), but since I have 2 zones hooked up to my PC (main is on optical, zone 2 only works with analog), I can't accept Vista as an option. Also, Creative's audio software (and Auzentech's) basically have to emulate XP's audio stack to work. This means constant extra processing has to be done if you have Vista.
