I understand that the XLE card is a switch and a sound card in the same time. First question is:what is the quality of the sound card used by the XLE (important since the DAC is performed there)? With what commercially availabe sound card can it be compared?

Second question: would I be able to “replace” the sound card used by Casatunes software with my own installed (and potentially better quality, say Auzentech Prelude) card, but still be allowed to use the switch capabilities of the XLE card?

I can see that this is possible in respect to Russound and Nuvo switches ... bu I am not sure as to whether this is possible with the switch built-in the XLE card.

The XLe and XLi specs are pretty good.
You can find them at the XLe product page, under the specs tab. As you will see, distortion levels are below 0.05% and freq response is very flat. These are generally considered to be lower than what a person can hear.

It is similar to the Creative PCI-e based X-Fi Extreme, shown here: http://us.store.creative.com/Sound-Blaster-XFi-Xtreme-Audio-PCI/M/B000W7PNZI.htm

The only way you can use an Auzentech or similar product is if you use an external switch, like the NuVo or Russound and use the actual Auzentech hardware with our software, since our audio decoders are integrated tightly in our XL hardware.

Kim