These issues are highly debated (just see the attempts to discuss the Mac Mini) so I don't want to get into a back and forth. Of course, here I go with my post, anyway, right?
However, I have found based on my personal experience that the stock SB Touch is less than what I would listen to with even a modest off-board DAC. However, once I had my Touch modified by Wayne (I did the "digital" mod and the power supply mod, including Bybee Music Rail), the change was dramatic. It would be very easy to A/B if someone had a stock SB Touch...I have no doubt that every single person would prefer the modified Touch and not by a small margin.
There are different levels of modification as well as different types of modifications possible. These include the Touch itself (modifying the digital side, the analog side, and the internal power supply) as well as the external power supply (linear, linear plus better filters, linear plus better filters and Bybee Music Rail). There is even a simple analog mod for under a hundred bucks that, when combined with a linear power supply, would be a noticeable change.
I was impress by the impact of well designed mods to the Touch. YMMV
John
John Kessel
Hawthorne Audio AMT K2 Reference Speakers
Paramount 300B w/MQ All Nickel Iron, Mundorf S/G 5.5 uF, and Vcap Teflon .1 uF
Auralic Taurus Preamp/Auralic Vega DAC/Auralic Aries Streamer
and lots of room treatments!