I've considered this same purchase many times. Have always come back to thinking an AppleTV is a better deal. Cost about $60 less and you get a 160 GB hard-drive to boot. Downside is you need a TV or monitor to connect the AppleTV to to be able to navigate the menus. Or, if you have an iPod Touch, you can use it with the REMOTE app to control the AppleTV, which eliminates the need for a video monitor.
Sound quality from both the Wadia and Apple units is identical from what I've read. Both output an optical digital signal and require a DAC to convert the signal to analog.
AppleTV also requires a wired or wireless network in your house to sync automatically with iTunes.