StratMangler, I agree that the DVI output will be superior. However, unless you have a really crappy VGA out, the difference between VGA and DVI should not be incredibly noticeable at a resolution of "only" 1920x1080. I say "only" because, for a PC, that is NOT a staggeringly high resolution. For a TV, yes... but a PC, no. I've been using 1280x1024 (roughly, emphasis on roughly, the 4:3 version of the same resolution) for well over 3 years via VGA every day, and it has always looked just as good as my DVI connected monitor of the same resolution at work. First I was using an ATI card, don't remember the exact model, and then in the past year+ a 6800GT.
As a side note, that's not really a correct comparison. A good DAC isn't really "compressing" the signal in the same way that an MP3 would be vs a straight WAV file. It's merely converting it. Big difference. I do get what you're trying to say though.