I have a very similar system to yours:

Mac Mini -> SB3 (unmodified) -> Chord Cobra 2 interconnects -> Rotel
RA-05 -> QED Silver Anniversary cable -> B&W CM1 speakers

The whole setup is just a few weeks old.  When I first started
listening I was hearing quite penetrating siblance ('ssss', 'fffff'),
on both male and female vocals.  After a few weeks, the siblance is all
but gone (occasionally noticable on some female jazz tracks, but much
less marked).  I almost bought an external DAC, but I see little need
now (though would love to try one out)!

The biggest improvement in siblance happened over the New Year weekend,
when I did three things:

1. Acquired a replacement power supply for the Squeezebox.  I used a
'regulated' 5v 2A supply - it doesn't look large enough to be linear,
so I imagine it's just a switching supply.  This was item number
PSC01515M from these people: http://www.remtrak.com/psu/dcregpsu.htm
(if you do this, be very careful that you plug the adaptor in the right
way round or you might fry your Squeezebox)

2. Bought a Tacima CS929 mains conditioning block, and plugged both the
SB3 and amplifier into it

3. Held a New Years house party, and gave the system a good initiation
with about six hours (sorry, neighbours!) of very loud playing time. 
Even managed to overheat the amplifier at one point (I'm pleased to
report that the Rotel amp has an effective 'cut-out' switch)

I suspect that the good, solid 'burn-in' session had the biggest
effect.  In retrospect, we can't hear any difference between the power
supplies, but it feels good to be using the power conditioning Tacima
block.

Try these things first, then go for the DAC if you're feeling
adventurous!

Rob.


-- 
robw
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