Not JUST the conversion, but also the fact that your tiny cell phone is sending that digital signal, converted to analog noise up that 3.5mm jack and that alone can make the sound suffer a lot. So I like to keep it dig (pronounced didge!)!
Well I just got my head unit installed yesterday after 3 weeks of steady research. I found one for $230 which has all the features of one that costs $1000, so I know what you are talking about but I was really able to get a great value. Bluetooth in the home and bluetooth in the car has made my life really wonderful, and I always still have my direct USB audio out on my home computer, into a mixer, into 2 studio monitors so the sound is just so amazing, even with mid range quality mp3s. Obviously, top notch speakers which can recreate all the sounds present are a must. Mine have the amplifiers built in which helps as well.
I added bluetooth to my computer with a $5 ebay usb adapter from china, but it only does A2DP, so I bought another brand name one for $30 which does A2DP and HFP (for phone calls), and I'm still waiting for that to come in.
Blackberry doesn't currently support sending USB audio out. However, in the case of my home computer, it's not my computer that supported it, it's the mixer I'm plugging into which runs via USB 1.1 and installs the codec automatically when plugged in. It's great! I have no receiver whatsoever, and a mixer is just so much cooler cuz all the "doors" are open for all sources at all times, whenever they are ready to start chirping.