Kartracer:
Since you have the SB Duet, you are undoubtedly running the SqueezeCenter software, which will down-convert 24/96, or anything higher, to the Duet's native 24/48 output. Im not sure if SqueezeCenter up-converts 16/44 to 24/48, or if it simply streams the 16/44
anyone?? Now, what I don't know is what the DL-III does with the 24/48 signal. It will depend on what it supports natively (maybe the PS Audio website has this information available), but remember it is an up-sampling DAC. So, if you have the DAC set on 24/96, it probably takes the 24/48 signal (and/or 16/44) and up-samples it to 24/96 (I assume this is the protocol). In native mode, the PWD will support up to 24/192 without any up-sampling (i.e.: it will support the Duet's 24/48 "signal" natively).
PS says that the USB on the PWD, which supports 24/96, runs straight to I2S and is one of the best USB interfaces available, but the Duet doesnt support USB so you and I will have to run S/PDIF. Once the Bridge arrives, the best interface between it and the NAS will be Ethernet (or wireless if they go that route, but it sounds like theyre still undecided), effectively eliminating the need for USB or S/PDIF. The Bridge will also go directly to I2S (the PS protocol is to place the Bridge/Lens in the chain prior to the analog conversion, at which point it is output to I2S with asynchronous clocking).