Yes, easiest is two separate inputs, i.e.  cd & dvd.  But you could also
switch between input types (analog/digital) on any single input.

Benefit?  Only that you might be able to select which output type sounds
better to you.  For low to mid level gear there will be little if any
difference.
How much (if any) audible difference is very subjective and depends on
many factors.


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