By default Media Center should play back DSD files as PCM - you need to enable bitstreaming if you want to send native DSD to a DSD-capable DAC.
You can also use Media Center to convert DSD files to PCM formats (e.g. FLAC) but it should not be necessary unless your CPU is not fast enough to handle this conversion in realtime.
Editorial - the current DSD fad seems to be fueled by labels looking for more sales. Most engineers who prefer high resolution, prefer 24/192 PCM to DSD. Some have theorized that DSD was originally created by Sony simply because it does DRM better...
DSD was superior to PCM back when it was being thought up, but PCM has surpassed DSD performance in most regards now.
Some people will argue that 2/4/8x DSD is superior, I think the mastering process matters far more than the final output format.
As someone with a DSD-capable DAC, I don't hear any meaningful difference between Media Center decoding DSD files to 176.4kHz PCM, or bitstreaming native DSD to the DAC.
Converting to PCM allows me to take advantage of Volume Leveling and other DSP when listening to DSD native tracks, which would not be possible if it was bitstreamed.