I had a chance to talk to a friend of mine who's an expert on this sort of things and he helped me understand what the problem was.

So for others having the same problem.......he explained to me that when you connect the Rio or any other audio device thru digital connection (ie optical or coaxial cable), the audio device is serving only as a simple transport system. So the Rio is only transporting/moving the pure digital data from its hard drive straight in its digital form, thru the digital cable (ie optical in this case) to an outside receiver/processor to be converted by it's DAC to it's analog form so we can hear the sound.

So, this means there is absolutely nothing wrong with Rios DAC or any other external DAC (since I got the same results using a different receiver). What is wrong with the Rio is that it is not a very good transport system and is making errors and/or interference when feeding the digital data to an outside DAC. In fact he told me people who buy expensive external DAC for music like cds, etc, etc also buy very expensive cd players that doesn't even have DACs so that they can get an accurate error free flow of digital data to their external DAC.

Surprisingly, he was aware of the Rio central when it came out long ago. He suggested to me that the Rio central in the days actually used a very good internal DAC and recommended me to connect to my receiver using analog cables. That way, instead of using the Rio as a transport system and my receiver as the DAC which supposedly has a good Barr DAC, the Rio's DAC will actually convert the digital data to analog and my receiver will just serve as the amp.

Using the analog connection and after listening to hours of music, I have ZERO intermittent/random static-crackle noises. The sound actually sounds different too....better in fact for my preference.

I was always told that digital connection is better than analog, but this is actually VERY wrong and inacurrate from what I have learned. The advantage of digital connection is that you don't get interference (thru cable connections), but what ultimately determines the sound quality is the DAC and amp. And so analog connections can sound much better than digital connections depending on the equipment.