I'm not sure you really want me to anwer your questions, but I will anyway

Which connection are you using (optical or coax)?
I use the coax.

What type of component with D/A are you connecting to?
I connect to a studio ADDA converter.

Is the sound quality noticably better with the digital connection?
In my case yes, but I don't think it's night and day for the average person that's content to listen to music over $200 minisystem. It really depends on the equipment you connect it to. I'm sure there are DACs out there that sound WORSE than the hardware in the Empeg. Connecting to such equipment would only worsen the sound. Also, the better the DAC, the more you will notice any compression artifacts.

Stu