Hi Hrishi,
just my 2 cents, based on some of my experiences.
1. Never mix audio with video [If you need to turn on TV to listen music chances are you wont!]
2. Keep it simple [I sometimes prefer easy of simply placing the CD in the tray and pushing the play button! It is the easiest way to get to the music so think about it!]
3. Getting a DAC is a good idea for flexibility. [It gives flexibility. Get a basic transport like a DVD player or old CD player and take digital out and feed it to a decent DAC]
4. DVD player may disappoint in long run [A decent DAC will sound better than a DVD player for the same money]
I would suggest a local cheap CD/DVD player [digital out] -> DAC ->
In this way you can choose a DVD player to play from your USB/HDD.
You DAC can take any device having a digital output. So it becomes very extensible and flexible.
Note: Sometimes it is not about the audio quality but the overall experience. the more pleasant the overall experience the more you will end up spending time *listening* to your system.
In the end it is a trade-off do you want a system that is easy plug and play or has start up time to get to the music.
Thanks guys for your valueable updates: now here is update from my side on the basis of your inputs :
Please tell me which option i should choose now :
1. DVD Player : So to plug n play Pendrive
2. Fiio DAC inorder : so to play with laptop... please clarify if i can connect this DAC with my Samsung Galaxy 2 mobile and play with mobile too.
3. Asus Oplay media player + Fiio DAC : so to play my pendrive or HDD,please notice i dont have TV so dont want any dependency on TV to play this Asus.
4. One of forum member is selling his Logitech SqueezeBox : so should i go for it.
A good Audio quaility is must for me..only this is the reason i am setting up my first Stereo Setup.
Please advice.. Thanks for any reply.