Assuming I buy & use an external A/D converter using s/pdif, will it bypass my sound card's converter ?
Certainly. The SPDIF input on your soundcard is purely digital, A/D conversion must happen prior to hitting your soundcard's input (e.g. by your external A/D device!).
Would I use my sound card at all ?
Yes, sorta. You'd still be using SPDIF. The term "soundcard" is confusing....there are digital only interfaces, which often called "digital soundcards", for instance.
Also, if you don't have an external D/A device, you will still use your soundcard's D/A for playback.
Could a converter be used with a USB port ?
Soitenly! I know they exist, but I don't have any experience with USB interfaces....any USB audio interface is really going to be a "converter with a USB port."
In fact, anything digital with an analog input or output is doing conversion....that's why the self noise of a POD sounds like "lasdfkjadkwilalzzzkdieakfjzzzzz" and the self noise from your real amp sounds like "shhhhhhhhhhhhhhhhhhh".
Will my sound card run into problems converting back to analogue at play back ?
Why would it? Inputs and outputs are really seperate things.
Will I need an external D/A converter ? Is there a purpose to
this ?
You would if you are unhappy with the way your soundcard sounds! A/D conversion is probably a little bit more important than D/A conversion in a home setup, but they are pretty close in importance.
What are the advantages & disadvantages to external converters ?
1) The biggest advantage really is sound. Many people have a hard time hearing their converters because they try to listen for some kind of "sound"....they don't have a sound at all...it's what they lack in accuracy that gives them a particular sound quality.
An external converter will typically be of better quality because that's the way the boat floats. Amatures prefer soundcards and professionals prefer big rackmountable toys. I'm sure there are inherint benefits to an external design as well...seperate power supply, not being inside a noisy computer, lots of good shielding, plenty of room to work with...
Oh, another benefit to an external converter is that they can plug into any compatible digital interface. This is another reason why a professional converter would be implemented as an external unit instead of a soundcard....pro's simply have more wires and plugs
2) The disadvantage is usually price. External converters are often expensive because the target audience can hear the difference between a very robust and well-tested design and a cheaper, easier to implement design. We're talking anywhere from $100 per channel on the cheap side (which is about what a soundcard might run at) up to $1000-$2000+ per channel on the expensive side.
Slackmaster 2000