The Appletv can either decode DD internally or bitstream it via optical or HDMI. Since you are only using two speakers, set the Appletv to decode internally and you are all set.
I think for $400, the DACMagic is the way to go. If that is out of your range, you may want to consider holding off on the DAC until you can justify it.
Just my opinion.
The question I have now would be if it would be better to just get a cheap receiver?
Any recommendations? Again, price is a concern here, I'd definitely say cheaper is better.
If you want 5.1 sound from streaming that includes it, you will need a receiver that can decode the sound and send it to the correct speakers. Of course, you need a multi-channel receiver anyway if you intend to actually listen to 5.1 sound with at least 6 speakers. So a stereo receiver won't really be much help there. I'm sure there are some other options, but this is the standard way to listen to multi-channeled theater sound. You don't have to spend that much for a good A-V receiver, but that is really your best option to hear everything the director intended coming out of each speaker.
I would recommend the Cambridge Audio DAC Magic for approx. $350 or so if you can swing it. It is quite the stellar performer for the money and quite flexible.
I think for $400, the DACMagic is the way to go.
The thing is; I'm not going to be listening in 5.1. Since the ATV doesn't have an analog out, I have to go optical. I might as well continue that for my computer, since its built in DAD/C is homebrew intel. Therefore since I have a 2.1 system, and since I'm going optical out of the ATV, I need a DAC. At that point though I might as well get a receiver, stereo or otherwise, since these usually include a DAC. I realize there's a difference between multi-channel and stereo receivers; that's why I'd like something that's flexible. That is, it'll take my 2.1 system now and anything larger I throw at it later. This would typically mean a multichannel receiver, but I'm not well versed in receivers, which is why I'm asking here![]()
Since you have a Marantz, I figured you might be interested in better than average sound, but a few hundred bucks is a lot for a single component like this. Almost anything you get should sound better than what an iPod or the old Apple TV output via analog, even what appears to be the cheapest with optical inputs:
SUPER Pro DAC 707 USB, $124 http://www.obadimports.com/catalog/item/6697671/5226912.htm
Dan