I've always used Exact Audio Copy, and they are vbr lame encoded. Not sure what the V0 means....
And while the DAC will make them sound better, will I be thinking "Sounds better if I pull the CD off the shelf" (although CDs are currently in my office, and listening room is home)
If you could swing $600 you could probably pick up a Benchmark DAC1 (non USB though). If you could live w/o USB that's the one I would go with. I've had owned the DAC1 USB on two different occasions and wouldn't hesitate to get one if my budget was under $2K.
This one is on closeout at Music Direct for $499
http://www.musicdirect.com/p-7414-ps-audio-digital-link-iii-dac.aspx
BTW- I have heard good things about the Valab Dac and leaned that way. But I am hesitant to order from China.
The audio-gd NFB2.2 is one heck of a DAC for $500, but you need to factor in shipping costs on top of that. The NFB17.2 and NFB3.2 are cheaper and damn close in performance.
I also like the Schiit Bifrost.

That Asus is damned overpriced. And ugly as well.I am also looking for better pc audio. have decided i want a dac..